Where Does $100 to the Heritage Foundation Go (2023)?

The Heritage Foundation (Heritage) is a non-profit, tax-exempt organization staffed by conservative “experts” who provide advice on political, economic, social, and financial problems in the United States. Based in Washington, DC Heritage raises about $100 million annually, spends less than they raise and therefore has about $330 million in net fund assets.  Specifically, Heritage is well known for publishing Project 2025 – a controversial “roadmap for how to replace the rule of law with right-wing ideals” according to the ACLU.

There are 17 voting members of the governing body, 16 of whom are independent of which 13 (76%) are male while 4 (24%) are female.

In 2023, Heritage raised $101 million, most of which came from contributions, gifts, and grants. Expenses totaled $104 million (not including $4 million in depreciation) and can be viewed two ways:  by broad general category (program service, management and general, and fundraising) or by specific line item categories (i.e. compensation, office-related, travel and conferences, fees for services, etc). Both ways are beneficial with the latter approach providing more specific detail on how revenue was spent.

Expenses by Broad General Category

The $104 million in expenses (including $4 million in depreciation) were categorized as follows:

• $85 million (84% of revenue):  Program Services
• $ 3 million (3% of revenue):  Management and General
• $16 million (16% of revenue):  Fundraising

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

$100:  Revenue

-$ 84:  Program Services

-$ 16:  Fundraising

-$  3:  Management and General Expenses

-$103:  Total Expenses

-$  3:  Excess Expenses over Revenue

As illustrated above, $84 out of every $100 was spent on program services while $19 out of every $100 was spent on fundraising and management and general expenses.

Expenses by Specific Line Item Category

The $104 million (103% of revenue) in expenses were categorized as follows:

• $49 million (49% of revenue):  Compensation
• $23 million (23% of revenue):  Office-Related
• $17 million (17% of revenue):  Fees for Services
• $10 million (10% of revenue):  Travel and Conferences
• $ 1 million (1% of revenue):  Advertising and Promotion
• $ 2 million (2% of revenue):  Grants
• $ 2 million (1% of revenue):  Other Expenses

As illustrated above, the largest expense for Heritage is compensation ($49 million) for the organization’s 517 employees who received an average compensation of $96,000. 163 employees received more than $100,000 in compensation with the most highly compensated employee, Kevin Roberts, the President, receiving $953,920.

Office-related expenses were the second largest expense made up primarily of three expenses:  office-related ($13 million) with no detail provided, IT ($4 million), and occupancy ($4 million).

Fees for Services ($17 million) were primarily fees paid to non-employees, $13 million of which is not detailed. $2 million was paid to professional fundraisers while nearly $1 million was paid to investment managers. It is important to point out that Heritage paid more than $100,000 to 59 organizations with the 5 most highly compensated organizations listed below:

• $10 million:  DPR Construction, of Redwood, CA for construction
• $ 2 million:  MDS Communications, of Mesa, AZ for fundraising consulting
• $ 1 million:  Tilt Group, of Houston, TX for event service provider
• $ 1 million:  Conrad Direct, of Creskill, NJ for mailing contact management
• $ 1 million:  Gaylord National Resort and Convention Center, of National Harbor, MD for venue

It is important to note, Heritage used outside sources for fundraising. These fundraisers raised $27 million, retained $3 million (12%), netting Heritage $24 million.

$10 million was spent on travel and conferences, including first class or charter travel and companion travel (see Form 990, Schedule J, Part III, Supplemental Information for more detail).

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

$100:  Revenue

-$ 49:  Compensation

-$ 23:  Office-related Expenses

-$ 17:  Fees for Services

-$ 10:  Travel and Conferences

-$  2:  Grants

-$  2:  Other Expenses

-$  1:  Advertising and Promotion

-$103: Total Expenses

-$   3:  Excess Expenses over Revenue

As illustrated above, $73 out of every $100 in revenue was spent on compensation and office-related expenses. $17 out of every $100 was spent on compensating non-employees while $7 out of every $100 was spent on travel and conferences. $1 out of every $100 was spent on advertising while $2 was spent on grants (12 grants greater than $5,000 were made with the largest ($500,000) to a related organization called Heritage Action for America.

Net assets at year-end were $348 million.

To read the IRS Form 990 (2023), click here.