How Revenue is Spent at the AFL-CIO (2022)

The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) is a federation of 60 labor unions that represent 12.5 million workers. A non-profit, tax-exempt 501 (c) (5) – a labor organization, the AFL-CIO is headquartered in Washington, DC.

Key facts about the AFL-CIO include the following information taken from the IRS Form 990’s:

The AFL-CIO has 19 related tax-exempt, non-profit organizations, 15 of whom operate out of the same office address. The other 4 organizations also operate out of a two DC-based offices but at a different street address, and an office in Silver Spring, MD.

There are 104 voting members (board members) of the governing body, 94 of whom are independent.  100 are listed on the Form 990 (due to timing differences);  77  are male while 23 are female.

Revenue has been declining since 2013 when total revenue was $158 million. By 2017, revenue was down to $140 million and by 2018, total revenue was $119 million which appears to indicate membership has been declining but could also be due to a decline in royalties, or a combination of both. However, more recently in 2019, revenue increased to $126 million but in 2020 revenue declined to $114 million and appears to have stabilized in 2021 ($110 million) and 2022 ($111 million).

Revenue primarily comes from two sources:  memberships dues and royalties. In 2022, $69 million of the $111 million (62%) came from memberships dues while $34 million (31% of total revenue) came from royalties.

Expenses totaled $102 million (92% of revenue) in 2022 – $9 million less than the revenue raised. The $9 million was added to the general fund, which was offset by $10 million in net unrealized losses on investments, leaving net assets virtually unchanged at $79 million at year-end.

The $102 million in expenses can be categorized as follows:

• $46 million (41% of revenue):  Compensation
• $20 million (18% of revenue):  Grants
• $10  million (9% of revenue):  Office-Related Expenses
• $ 9  million (8% of revenue):  Royalties
• $ 7  million (6% of revenue):  Travel and Conferences
• $ 4  million (4% of revenue):  Printing and Publications
• $ 3  million (3% of revenue):  Fees for Services (primarily other with no detail)
• $2  million (2% of revenue):  State Unity Fund
• $ 1  million (1% of revenue):  Interest and Other Expenses

As illustrated above, compensation used up 41% of revenue in 2022. 428 employees received $46 million in compensation, which equates to an average compensation of $107,000. However, only 148 employees received more than $100,000 in compensation. The most highly compensated employee was Sean McGarvey who received $674,570 (from a related/affiliated organization).

The AFL-CIO paid for first class or charter travel, travel for companions and made gross up payments or provided tax indemnification.  No detail is provided.

117 grants (primarily to 501 (c) 5’s) greater than $5,000 were made with the 7 largest reported to be:

• $7.1 million:  Working America, of Washington, DC for program support, office space
• $1.1. million:  Neighborhood Funders Group, of Oakland, CA for lift fund grant
• $895,804:  AFL-CIO Technology Institute, of Washington, DC for program support, office space
• $840,000. National Labor College, of Silver Spring, MD for operating subsidy’
• $600,000:  Alliance for Retired Persons, of Washington, DC for operating subsidy
• $506,000:  Martin Luther King  Jr County Labor Council, of Seattle, WA for solidarity funding
• $320,000:  Minnesota AFL-CIO, of St Paul, MN for solidarity funding and program support

Using the above information, every $100 in revenue was spent as follows in 2022:

$100:  Revenue

-$ 41:  Compensation

-$  8:  Royalties

-$  9:  Office-Related Expenses

-$  4:  Printing and Publications

-$  6:  Travel and Conferences

-$  1:  Interest and Other Expenses

-$  2:  State Unity Fund

-$  3:  Fees for Services (primary other with no detail provided)

-$ 74: Subtotal:  Organization Expenses

  $ 26:  Revenue Remaining

-$ 18:  Grants

 $  8:  Revenue Remaining:  To General Fund

As illustrated above, $74 out of every $100 was spent on organization expenses while $19 out of every $100 was used for grants – primarily to other labor organizations.

It is important to note the AFL-CIO ended the year with $79 million in net assets, compared to $80 million the prior year. The improvement is primarily due to the organization spending $9 million less than they raised in 2022 which was offset by $10 million in unrealized losses on investments.

To read the IRS Form 990 (2021 for the year ending June 30, 2022), click here.