The National Rifle Association is traditionally one of the most powerful and financially intimidating interest groups in Washington. But a new third-party audit of the group’s finances obtained by OpenSecrets raises questions about its long-term fiscal health.
The document offers the first look at the NRA’s finances in the wake of the 2016 elections. It shows that for the last two years, the NRA saw plummeting income from dues-paying members, and that has, in turn, fueled growing deficits.
The NRA went big in 2016, breaking its own spending records to help catapult Donald Trump into the White House and protect Republican majorities in the House and Senate. The organization’s Federal Election Commission reports show that the nation’s preeminent gun-rights group spent at least $54.4 million boosting Republicans — with Donald Trump being, by far, the biggest beneficiary of that firepower, reaping $31.2 million in support.
The bulk of the NRA’s spending in 2016, $35.2 million, was channeled not through its political action committee, but through its 501(c)(4) nonprofit arm. It’s this section of the NRA — which doesn’t have to disclose its donors — whose finances are reported in the audit obtained by OpenSecrets.
Such nonprofits are not supposed to have politics as their primary purpose, but they can raise and spend unlimited funds from anonymous donors and easily spend millions on elections without much oversight from the IRS or the FEC. The fact that they can do so without disclosing their donors is why they are often referred to as “dark money” groups.
The NRA’s massive 2016 push was part of what ultimately became a $100 million spike in the group’s outlays between 2015 and 2016. But that spending wasn’t matched with similar growth in revenue, leaving the NRA with a deficit of more than $14.8 million.
This deficit is in what’s called “unrestricted” net assets, which are funds that are available to be spent at the discretion of a board.
A year later, with its chosen candidate in office, the NRA’s spending plummeted by $76 million, according to the audit.
It’s normal for the spending of an organization as politically active as the NRA to rise during election years and fall in off-years when such groups tend to fundraise and try to get their financials in order. But even with such a steep decline in spending, the NRA — one of the wealthiest, most powerful political forces in the nation — remained in the red, as its revenues tumbled by $56 million.
“Their current business model cannot be sustained the way it is going,” said Brian Mittendorf, an accounting professor from Ohio State University. “It can be sustained in the short term, but not the long term. The financial statements would indicate that.”
By the end of 2017, the group spent $26.1 million more than it brought in, expanding its existing deficit from the previous year to $31.8 million.
“The big takeaway is that there were some red flags about their long-term financial health in 2016,” Mittendorf told OpenSecrets, “and nothing alleviates those concerns in their 2017 financials. If anything, it shows they’re coming to fruition.”
This two-year deficit is a steep decline from the NRA’s $27.8 million in positive assets from 2015.
More striking is that one of the biggest drivers of the group’s falling revenue is dwindling dues from NRA members, which fell from more than $163 million in 2016 to $128 million in 2017.
It’s that last sentence that is the most interesting. That’s a serious decline in dues money. People are dropping out of the NRA. There could be a number of reasons for this, I suppose, including I guess white people thinking they are safe now that Mr. Scary Black President is no longer in office. But it’s also at least possible that a lot of members have their own limits in terms of right-wing politics and think that this organization is too far out for them.
Of course, Vladimir Putin can easily make up those dues losses himself and it’s very much in his interest to do so.