How Membership Dues Are Spent at the National Association of Realtors (NAR) 2021

The National Association of Realtors (NAR) is the largest professional trade association in the US. A non-profit tax-exempt 501 (c) (6) based in Chicago, Illinois, NAR represents 1.5 million members who belong to one or more of the 1,200 associations/boards and 54 state or territory associations.  Members can be residential or commercial brokers, sales people, property managers, real estate appraisers, counselors and others who work in the real estate industry.

NAR functions as a self regulatory agency, a lobbying organization, and as a provider of accreditation and certification of designations.

Key information to know about NAR include:

• NAR is based in Chicago with about 350 employees.
• NAR has 1,266 voting members of its governing body.
• NAR has historically. generated about $300 million annually, primarily through membership dues.
• NAR has historically spent less than they raise, allowing the organization to accumulate nearly $800 million in net assets by year-end 2021.

So, how are membership dues spent?  The short answer is that about 29% of membership dues are spent on compensation and office-related expenses.  34% is spent on fees for outside services (primarily a media company), advertising and promotion, public policy, and travel and conferences.  10% is spent on grants, subscription services, and other expenses while 27% is added to the general fund..

In 2021, NAR reported total revenue of $327 million (compared to $301 million in 2020, $338 million  in 2019, and $245 million in 2018), of which $284 million (87% of revenue) came from membership dues.

Expenses totaled $240 million (not including $7 million in depreciation) – 73% of revenue – in 2021 and can be categorized as follows:

• $65 million (20% of revenue):  Compensation
• $60 million (18% of revenue). Fees for Services
• $28 million (9% of revenue):  Office-Related Expenses
• $24 million (7% of revenue):  Advertising and Promotion
• $18 million (5% of revenue):  Travel and Conferences
• $13 million (4% of revenue):  Grants
• $12 million (4% of revenue):  Public Policy Expenses
• $12 million (4% of revenue). Other Expenses (primarily “other” with no detail provided)
• $ 8 million (2% of revenue):  Subscription Service Expenses

As illustrated above, the two largest expenses are compensation and fees for services.  356 employees received $65 million in compensation (an average of $182,000) with the most highly compensated employee reported to be Bob Goldberg, the CEO who received nearly $2.6 million in compensation in 2021.  It is also important to note NAR paid for first class or charter travel, companion travel, health or social club dues or initiation fees, personal services, and provided gross up payments and tax indemnification.

Fees for services were primarily to a company called Havas Media Group who received $46 million in compensation for marketing and communications.

Using the above information, every $100 in revenue was spent as follows:

$100:  Revenue

-$ 20:  Compensation

-$ 18:  Fees for Services

-$ 9:  Office-Related Expenses

-$ 7:  Advertising and Promotion

-$ 5:  Travel and Conferences

-$ 4:  Grants

-$ 4:  Public Policy Expenses

-$ 4:  Other Expenses

-$ 2:  Subscription Service Expenses

-$73: Total Expenses

 $27:  Excess Revenue:  To General Fund

NAR spent $73 out of every $100 on organization expenses.  $29 out of every $100 was spent on compensation for the 356 employees and office related expenses; $34 out of every $100 was spent on fees for outside services (primarily the Havas Media Group), advertising and marketing, public policy, and travel and conferences, while $10 out of every $100 was spent on grants, other expenses, and subscription services.  $27 out of every $100 was added to the general fund.

To read the IRS Form 990 (2021), click here.