How Revenue is Spent at AARP (2024)

AARP – the American Association of Retired Persons – is a tax-exempt, non-profit organization who offers a broad mission:  “to empower people to choose how they live as they age” but more specifically focuses on the issues and benefits of those 50 years and older.

With an estimated 38 million members who pay $15-$20 annually, AARP is one of the largest non-profit member-based organizations in the country. However, membership dues are not the main source of AARP’s revenue and expenses are not dominated by member services. Instead, AARP relies primarily on royalties for revenue with expenses dominated by compensation and advertising/promotion.

Based in Washington, DC, AARP has 12 voting members in its governing body, 11 of whom are independent; although 14 are listed on the most recent Form 990 (2024); 7 of whom are female while 7 are male.

2024 was a very good year for AARP because United Healthcare made a one time “royalty” payment of more than $9 billion as part of an extended 12-year agreement allowing UnitedHealthcare to continue marketing AARP-branded Medicare Advantage and Medicare supplement plans.  If a healthcare company can afford to pay more than $9 billion to sell Medicare Advantage and supplemental plans for 12 years (or $750 million annually) then the profitability of these plans must be acknowledged (and in other words, the monthly premium Medicare members pay for these plans must be significantly more than the cost to administer these plans).

Total revenue was $11 billion in 2024 (compared to $1.7 billion in 2023, $1.8 billion in 2022 and $2.0 billion in 2021) with the largest sources of revenue from royalties ($9.9 billion), memberships dues ($371 million), investment income and gains ($449 million), and publicatio, digital, and advertising revenue ($162 million), which means AARP is primarily engaged in obtaining revenue from royalties through the use of their name with the sale of insurance policies and other products sold to members.

Expenses totaled $1.8 billion in 2024. To better understand expenses in relation to revenue, the United Healthcare one-time payment of approximately $9 billion will not be included which means total adjusted revenue was approximately $2 billion.  This is done because so many of the expenses are based on a “normal” year when AARP raises about $2 billion (in other words, the $9 billion one time hit in revenue from United Healthcare didn’t really change expenses in 2024):

• $425 million (21% of revenue):  Compensation
• $367 million (18% of revenue):  Advertising and Promotion
• $330 million (17% of revenue): Fees (primarily consulting and professional services for programs)
• $296 million (15% of revenue):  Printing and Postage
• $174 million (9% of revenue):  Office-Related Expenses (primarily IT expenses)
• $ 40 million (2% of revenue):  Grants
• $ 92 million (5% of revenue):  Other Expenses
• $ 17 million (1% of revenue):  Research, Surveys, Taxes, Licenses
• $ 32 million (2% of revenue):  Travel and Conferences

As illustrated above, the largest expenses were for compensation for the 2,187 employees who received $425 million (or an average of $194,000), and advertising and promotion ($367 million).   1,550 (or about 71% of employees) received more than $100,000 in compensation.  The most highly compensated employee was Jo Ann Jenkins, who received $2.9 million in compensation in 2024.

AARP paid for first class or charter travel, travel for companions, gross up payments or made tax indemnification.  Specifically, AARP paid for first class travel for AARP board members, officers, and key employees when business class accommodations were not available for flights exceeding 5 hours (not hard to do with a connection), or when there is late night arrival, or medical reasons.  The CEO, President, and Board Chair were allowed to fly first class or business class on flights exceeding 90 minutes.

Therefore, every $100 in revenue was spent as follows:

$100:  Revenue

-$ 21:  Compensation

-$ 18:  Advertising and Promotion

-$ 17:  Fees

-$ 15:  Printing and Postage

-$  9:  Office-Related Expenses

-$  5:  Other Expenses

-$  1:  Research, Surveys, Taxes, Licenses

-$  2:  Travel and Conferences

-$ 88:  Subtotal Expenses: Compensation, A/P, Fees, Printing,Postage, Office, Travel

 $ 12:  Remaining Revenue

-$  2:  Grants

 $ 10:  Excess Revenue to General Fund

Bottom Line: AARP spent $38 out of every $100 on compensation, office, travel and conferences, research and surveys, and other expenses.  $50 out of every $100 was spent on advertising and promotion, printing and postage, and fees for outside services. An additional $2 out of every $100 was used for grants (or $40 million total).

It is also important to note AARPreceived $371 million in membership dues in 2024. If the average annual dues were $15, then there were approximately 25 million members (although AARP reports having more than 38 million members.

At year-end, AARP reported net assets of $12.1 billion – a $9.4 billion increase over the previous year with the growth attributable primarily to the one-time $9 million payment from United Healthcare.

To read the IRS Form 990 (2024), click here.