NRA got cash boost from foundation
The National Rifle Association has long tapped money from an affiliated foundation to pay for some of its nonpolitical operations. But something shifted last year: The NRA was reimbursed $17 million by the foundation for expenses, nearly three times the amount it received a year earlier.
That surge is notable. The NRA was running a deficit, locked in internal conflict over spending by executives and raising its dues for the second time since 2016. Little had changed in the financial picture of the affiliated foundation during that time, according to NRA financial disclosures reviewed by Bloomberg.
As the nation’s largest gun rights membership organization, the NRA takes part in advocacy and lobbying, so dues and contributions to it aren’t tax deductible.
Contributions to the allied NRA Foundation, which describes itself as a public interest organization devoted to firearms education and training, are generally deductible because the group limits itself to activities such as school safety and youth marksmanship that aren’t aimed at swaying policy.
“It looks to me like NRA is under financial pressure and became much more aggressive about how it’s booking expenses for time, space and office equipment,” says Brian Galle, a professor at Georgetown University’s law school and former prosecutor in the Justice Department’s tax division.
Turmoil has engulfed the NRA for months. It’s locked in expensive legal battles with New York Gov. Andrew Cuomo and its former public relations agency, among others. Internal feuding has led to several high-level departures and negative publicity.
Now, the surge in reimbursements could provide fresh terrain for government authorities. The attorneys general of New York and the District of Columbia are already reviewing the NRA’s nonprofit status after news reports and legal claims that NRA CEO Wayne LaPierre and other senior employees misused funds to underwrite lavish lifestyles. The NRA and LaPierre have denied wrongdoing.
The NRA didn’t respond to multiple email messages seeking comment.
It’s common for related nonprofits to share employees and facilities as the NRA and NRA Foundation do. When one reimburses another to cover expenses, the payments are supposed to reflect the amount of staff time, office space and other resources devoted to each. The IRS expects the groups to cover expenses based on the share of resources they use and their tax status.
The reimbursement payments to the NRA, totaling $17.4 million, were far higher than in previous years. From 2012 to 2017, they ranged from $6 million to $9.3 million annually, the NRA reported.
The records reviewed by Bloomberg provide only a partial financial picture. The NRA Foundation has disclosed some financial data from 2018, but its tax documents for the year aren’t yet available to the public.
The abrupt increase in reimbursements for expenses last year would suggest that the foundation funded dramatically more nonpolitical activities as a share of the groups’ overall work. But the NRA’s disclosures show that its spending on education, training, conferences and other programs was flat or down from the previous year. Also, the foundation’s finances don’t show a corresponding rise in revenue or overall expenses.
Galle, the former federal prosecutor, said he wouldn’t expect the IRS to challenge the NRA’s accounting.
“It would be very difficult to do,” he said. “You’d need a team of lawyers and forensic accountants. There’s no obvious revenue gain to the IRS in doing an audit like this, and there could be huge political blowback from auditing an organization that knows it can pick up the phone and call the president.”