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National Rifle Association (NRA)

CharityWatch report issued
January 2021

 
CharityWatch Grade
 

Contact Information

National Rifle Association (NRA)
11250 Waples Mill Road
Fairfax, VA 22030

Other Names

National Rifle Association of America
NRA
NRA Institute for Legislative Action

Tax Status

501(c)4

Website

www.nra.org

Stated Mission

To protect and defend the U.S. Constitution; to promote public safety, law & order, and national defense; to train law enforcement agencies & civilians in marksmanship; to promote shooting sports & hunting.

View similar charities
Data based on Fiscal Year Ended 12/31/2019

*Why a Question Mark Rating?

CharityWatch currently has concerns about this organization and/or is unable to provide complete rating information due to the organization's nondisclosure of financial information. Please see the Analysts' Notes section for a more detailed explanation.


Governance & Transparency

CharityWatch evaluates certain criteria related to a charity's Governance and Transparency. Donors may want to consider a charity's willingness to be open and transparent with CharityWatch to be a good litmus test for determining its commitment to public accountability.
National Rifle Association (NRA)
does not meet governance benchmarks.
 
National Rifle Association (NRA)
does not meet transparency benchmarks.

CharityWatch Governance Concerns

See Analysts' Notes for Explanation
Transparency
Provides Financial Information
Audit Accessibility
Governance: Policies
Reports regularly & consistently monitoring & enforcing compliance with a written Conflict of Interest Policy
Reports required, annual disclosure by officers, directors, and key staff of interests that could give rise to conflicts
Reports having a written Whistleblower Policy
Reports having a written Document Retention and Destruction Policy
Governance: Financials
Reports providing copy of tax form to all board members prior to filing it with IRS
Reports that financial statements were audited by an independent accountant
Governance: Board of Directors
Reports at least 5 voting board members
51% or more of voting board members reported as independent
Reports documenting minutes of board and board committee meetings
Privacy Policy
Privacy Policy

  Name Title Compensation
1 Wayne R. LaPierre Executive VP $1,884,709
  Note: Includes $455,000 bonus & incentive compensation.
2 Oliver North Board Director $986,015
3 Joshua L. Powell Chief of Staff/Senior Strategist $935,081
1
Name: Wayne R. LaPierre
Title: Executive VP
Compensation: $1,884,709
Note: Includes $455,000 bonus & incentive compensation.
2
Name: Oliver North
Title: Board Director
Compensation: $986,015
3
Name: Joshua L. Powell
Title: Chief of Staff/Senior Strategist
Compensation: $935,081

CharityWatch Analysts perform an in-depth analysis of charities' audited financial statements and IRS tax filings, and often review other documents such as state filings, annual reports, and fundraising contracts during their evaluations. Below are select notes that CharityWatch believes may be of interest to donors.

CharityWatch has issued a "?" rating for the National Rifle Association (NRA) due to concerns related to its governance practices which may impact the reliability of the NRA's financial reporting; and because it filed for Chapter 11 bankruptcy protection in January 2021, which may impact how the NRA uses future donations to the organization. CharityWatch has also issued a Governance Exception for the NRA on the basis that it is under investigation by the New York and District of Columbia attorneys general.

–  According to a January 15, 2021 article in USA Today, the NRA has filed for "Chapter 11 bankruptcy protection." 

–  According to an August 6, 2019 article in The New York Times, a spokesperson for the Office of the New York Attorney General (NY AG) stated that the NY AG "has been scrutinizing whether the N.R.A. was using funds designated for charitable purposes appropriately, and if payments made to board members, officers and affiliated parties complied with relevant tax laws and fiduciary requirements." In August 2019 the NY AG "issued a subpoena seeking documents from more than 90 current and former members of the organization's board," in an effort to obtain information that "would shed light on spending decisions made by the board," according to the article.

–  A July 12, 2019 article in The New York Times reported that the attorney general for the District of Columbia (DC AG) opened an investigation into the NRA and issued subpoenas "as part of an investigation into whether [the NRA and its related Foundation] violated the district's Nonprofit Act." The DC AG is interested in "examining 'financial records, payments to vendors, and payments to officers and directors,'" according to the article. The DC AG also intends to examine "whether the N.R.A. used charitable funds to provide private benefits to N.R.A. officials, and whether payments were improperly made by N.R.A. contractors like Ackerman McQueen, the association's former advertising firm, which paid hundreds of thousands of dollars for clothing and travel expenses for [NRA CEO/Executive VP] Mr. LaPierre," reports the NY Times. 

[For links to referenced articles, please see Related External Articles in the "Articles & Alerts" section, below. For more information regarding the lawsuits against the NRA, see CharityWatch's August 2020 article: NRA and NRA Foundation Facing Lawsuits—NY AG Seeks to Shutter NRA...]


According to the NRA audited Statement of Financial Position as of December 31, 2019, the NRA reported a Total Net Assets Without Donor Restrictions deficit of $(49,641,823) at fiscal year-end 12/31/2019. Included in the deficit is a Cumulative Pension Liability of $(26,535,199) at 12/31/2019.

The NRA reported a Total Net Assets balance of $9,654,157 at 12/31/2019. The Total Net Assets balance consists of the $(49,641,823) in Net Assets Without Donor Restrictions deficit, cited above, plus $59,295,980 in Net Assets With Donor Restrictions, according to the audited Statement of Financial Position as of December 31, 2019.

According to the NRA audit of December 31, 2019 (Note 1 re: Classification of Net Assets):

"Net assets without donor restrictions represent resources that are not restricted by donor-imposed stipulations. They are available for support for the NRA's general operations.

Net assets with donor restrictions represent contributions and other inflows of assets whose use by the NRA for its programs are limited by donor-imposed stipulations..."

CharityWatch's rating of the National Rifle Association (NRA) is for the the 501(c)(4) tax exempt, social welfare organization (tax ID #53-0116130). CharityWatch issues a separate rating for the related 501(c)(3) public charity entity, NRA Foundation (tax ID #52-1710886).

CharityWatch does not provide a rating for the other NRA affiliates, which according to Note 1 of the NRA 2019 audit, include the following: the NRA Civil Rights Defense Fund, the NRA Political Victory Fund, the NRA Special Contribution Fund, and the NRA Freedom Action Foundation.

CharityWatch separates the ratings for 501(c)(3) & 501(c)(4) organizations, even when the financial activities of both entities are included together in a consolidated audit, due to their differing tax treatments by the IRS. For more information on this topic, please see our sections on Types of Non-Profits, Tax Status, and Treatment of Related Organizations, which can be found on the Our Process page. For more information about things to consider when donating to organizations that have related public charity and social welfare entities, read "Sorting Out Nonprofit Pairs" in the "Articles & Alerts" section, below.


According to the National Rifle Association (NRA) audit of December 31, 2019 (Note 16, Related Parties):

"The NRA and the NRA Foundation are financially interrelated entities as the NRA is able to influence the Foundation's operating and financial decisions as well as the NRA having ongoing economic interest in the net assets of the Foundation. The NRA is affiliated with CRDF [NRA Civil Rights Defense Fund], SCF [NRA Special Contribution Fund] and the FAF [NRA Freedom Action Foundation] by virtue of the control vested with the NRA's Board of Directors to appoint the Board of Trustees of each affiliate. The PVF [NRA Political Victory Fund] is a separately unincorporated political action committee of the NRA whose five officers are NRA employees. The NRA provides certain benefits to the affiliates at no cost, among which are the use of office space and other administrative and support services. Management has determined that the fair value of these benefits is minimal, and accordingly, no amounts are reflected in these [audited] financial statements.

"The Foundation reimburses the NRA for certain expenses, such as salaries, benefits, and general operating expenses, paid by the NRA on the Foundation's behalf. These expenses totaled $15,377,886 and $17,482,315 for the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019 and 2018, $32,252,080 and $28,501,182 respectively, was owed to the NRA... In addition, certain qualified NRA programs were funded by Foundation grants totaling $12,073,526 and $13,498,464 for the years ended December 31, 2019 and 2018, respectively.

"The CRDF [NRA Civil Rights Defense Fund] reimburses the NRA for general operating expenses paid by the NRA on the CRDF's behalf. As of December 31, 2019 and 2018, $1,374 and $3,161, respectively, was owed to the NRA for general operating expenses... The CDRF reimburses the NRA for qualified legal costs totaling $652,384 and $433,872 for the years ended December 31, 2019 and 2018, respectively.

"All permanent employees of the SCF [NRA Special Contribution Fund] are maintained as employees of the NRA and the SCF reimburses the NRA for the total employee costs including benefits. The SCF reimburses the NRA for certain other expenses paid by the NRA on the SCF's behalf. As of December 31, 2019 and 2018, $342,184 and $192,190, respectively, was owed to the NRA for salaries, insurance and benefits net of certain other expenses owed by the NRA to the SCF...

"The FAF [NRA Freedom Action Foundation] reimburses the NRA for qualified legal costs totaling $977,377 and $999,774 for the years ended December 31, 2019 and 2018, respectively. 

"The NRA paid administrative and fundraising expenses of $2,908,114 and $5,105,006 for the years ended December 31, 2019 and 2018, respectively, on behalf of the PVF [NRA Political Victory Fund]."


Also according to the NRA audit of December 31, 2019 (Note 10, Notes Payable and Credit Agreements):

"During 2018, the NRA entered [a] secured loan agreement with the Foundation where the NRA's accounts receivable serve as collateral, which expired October 3, 2019. This agreement was extended to October 3, 2020. Under the terms of this agreement, the NRA makes monthly interest payments of 7.00%. At December 31, 2019 and 2018, $5,000,000 was payable under the agreement."

According to the National Rifle Association (NRA) 2019 tax filing (IRS Form 990, Schedule O re: Part VI, line 5), the NRA reports:

"The National Rifle Association became aware during 2019 of a significant diversion of its assets during 2019 and for prior calendar years. See Schedule L, Part V [certain parts cited or summarized below] for an explanation. In addition, a staff employee (who was not a disqualified person, manager, key employee or highly compensated employee) diverted $41,820.37 from the NRA but has fully repaid the organization, including interest, for a total of $56,241.35."


According to the NRA 2019 tax filing, the NRA reports re: Excess Benefit Transactions:

"The National Rifle Association has identified what it believes are excess benefit transactions in which it engaged in 2019 and in prior calendar years of which it became aware but were not reported on its prior Forms 990. These transactions are explained below. There are other transactions in 2019 and prior calendar years that are still under review by the NRA and/or are currently subject to dispute in [certain] legal proceedings...

"The NRA cannot at the time this Form 990 is filed determine whether these other transactions [subject to the legal proceedings listed] are excess benefit transactions" (IRS Form 990, Schedule L, Part V re: Part I, line 1 - 1a).

The individuals, dollar amounts, and other information the NRA reports in connection with excess benefit transactions includes the following:

– Joshua Powell, from 2016 through January 30, 2020 served the NRA as Executive Director of General Operations, Chief of Staff, and Senior Strategist: "...The aggregate excess benefit determined to be provided to Mr. Powell from 2016 through 2019 was $54,904.45. ... The NRA has rejected the check [tendered by Powell to the NRA for $40,760.20, in purported full settlement], so correction of the excess benefit has not yet been made. ... The amount of excise tax due...by Mr. Powell is determined to be $13,726.11. In addition, the New York State Office of the Attorney General has challenged, as unreasonable, compensation paid to Mr. Powell during the period from 2016 through 2019" (IRS Form 990, Schedule L, Part V re: Part I, line 1 - 1b).

– Christopher Cox, from 2002 through June 26, 2019 served as Executive Director of the NRA's Institute for Legislative Action (ILA) and was also an officer of the NRA: "...To date, the aggregate excess benefit from 2015 to June 26, 2019, determined to be provided to Mr. Cox is in excess of $1 million, which the NRA is seeking to recover. This is being disputed by Mr. Cox... The NRA believes that the amount of excise tax due...by Mr. Cox would be approximately $328,001.50" (IRS Form 990, Schedule L, Part V re: Part I, line 1 - 2).

– David Lehman, from 2002 through September 13, 2019 served as Deputy Executive Director: "...Upon information and belief, from 2015 to September 13, 2019, Mr. Lehman caused the NRA to pay for personal travel, club, and meal expenses in the aggregate amount of at least $87,595.83. The NRA has not yet completed its investigation of the extent to which Mr. Lehman may have received improper benefits, but if such expenses are substantiated, they were likely not approved nor intended to be compensated to Mr. Lehman by the NRA, and would thus likely constitute automatic excess benefits..." (IRS Form 990, Schedule L, Part V re: Part I, line 1 - 3).

– Wayne LaPierre, Executive Vice President and Chief Executive Officer of the NRA: "...From 2015 through 2019, the NRA estimates that it paid on behalf of Mr. LaPierre, directly or indirectly, travel expenses...in the aggregate amount of $299,778.78. The NRA has determined to treat the payments as automatic excess benefits... Mr. LaPierre has repaid this excess benefit to National Rifle Association, plus interest, and therefore the excess benefit has been corrected. The amount of excise tax due...by Mr. LaPierre has been estimated to be $74,944.70. In addition, the New York State Office of the Attorney General has challenged, as unreasonable, compensation paid to Mr. LaPierre during his tenure" (IRS Form 990, Schedule L, Part V re: Part I, line 1 - 4).

– Wilson Phillips, from 1993 through September 13, 2018 served as Treasurer and Chief Financial Officer of the NRA: "...The New York State Office of the Attorney General has alleged that compensation paid to Mr. Phillips during and after...his tenure was unreasonable" (IRS Form 990, Schedule L, Part V re: Part I, line 1 - 5).

– John Frazer, from 2015 through the present served as Secretary and General Counsel of the NRA: "...The New York State Office of the Attorney General has alleged that compensation paid to Mr. Frazer has been unreasonable" (IRS Form 990, Schedule L, Part V re: Part I, line 1 - 6).

– Oliver North, served as President of the NRA at times in 2018 and 2019; within the five prior years, he was also a voting member of its Board of Directors: "...Upon information and belief, during certain times in 2018 and 2019, Mr. North was employed by Ackerman McQueen, Inc. ('AM'), a third-party vendor of the National Rifle Association, to host a television show produced by AM. During the same period, AM invoiced the NRA for a variety of expenses which are now the subject of litigation, but are believed to have included salary, benefits, and related perquisites furnished by AM to North in connection with North's employment by AM. NRA paid all of these invoices to AM. Such payments may constitute an indirect benefit from National Rifle Association to Mr. North. ... The NRA has reason to believe that North failed to perform the services for which he had been contracted by AM, and for which he may have been indirectly compensated by the NRA. If that is true, then all or part of North's compensation by AM, paid indirectly by the NRA, would constitute an excess benefit..." (IRS Form 990, Schedule L, Part V re: Part I, line 1 - 7).

– Joseph P. DeBergalis, Jr., from 2015 through early 2017 was an NRA Director; from January 25, 2017 to the present, has served as an NRA Executive and Officer, including as Executive Director of General Operations: "...The NRA is currently reviewing whether Mr. DeBergalis may have used business class travel without authorization required under the NRA's travel policy. At the time of filing, the NRA is unable to estimate the amount of excess costs incurred, if any. If such expenses are substantiated, they were likely not approved nor intended to be compensated to Mr. DeBergalis by the NRA, and would thus likely constitute automatic excess benefits..." (IRS Form 990, Schedule L, Part V re: Part I, line 1 - 8).

– Board Member Travel: "The NRA is currently reviewing whether in 2019 and prior years, various board members may have used first class or business class travel without authorization required under the NRA's travel policy. At the time of filing, the NRA is unable to estimate the amount of excess costs incurred, if any. ... If such excess costs are substantiated, they would thus likely constitute excess benefits..." (IRS Form 990, Schedule L, Part V re: Part I, line 1 - 9).


In addition, the NRA reports re: Business Transactions Involving Interested Persons a transaction in the amount of $220,000 involving Marion P. Hammer, Board Director. The reported description of the transaction is:

"Marion P Hammer provided consulting services in the form of advice, analysis and other duties reasonably assigned by the Executive Vice President of the NRA and Executive Director of ILA [the NRA's Institute for Legislative Action] during 2019" (IRS Form 990, Schedule L, Part IV).

According to the NRA 2019 tax filing, NRA reports re: Compensation, Supplemental Information (IRS Form 990, Schedule J, Part III):

Regarding severance payments to officers, directors, trustees, key employees and highest compensated employees (Schedule J, Part I, Line 4a):

"Robert K. Weaver's employment as Executive Director of General Operations ended in 2016 and during calendar year 2019 Mr. Weaver received taxable compensation of $240,000 as year 4 of a 4 year severance agreement."


Regarding the payment or accrual of any compensation to officers, directors, trustees, key employees and highest compensated employees contingent on the revenues of the organization (Schedule J, Part I, Lines 5a):

"One individual listed on Form 990, Part VII, Section A, line 1a [Compensation of Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees], Todd Grable, received incentive compensation based on revenues received from certain marketing, recruiting, and licensing programs."

NRA reports a "Bonus & incentive compensation" payment in 2019 to Todd Grable, Executive Director, Membership, in the amount of $187,744, with reported total compensation of $701,941.


Regarding nonfixed payments to officers, directors, trustees, key employees and highest compensated employees (Schedule J, Part I, Line 7):

"Three individuals listed on Form 990, Part VII, Section A, line 1a [Compensation of Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees] (Mr. LaPierre, Mr. Spray and Mr. Frazer) received discretionary bonuses approved by the board of directors. Two individuals (Mr. Schropp and Mr. Hamlin) received discretionary bonuses approved by their supervisor."

NRA reports "Bonus & incentive compensation" payments in the following amounts to the above-referenced five individuals in 2019 (IRS Form 990, Schedule J, Part II):

(1) Wayne R. LaPierre, Executive Vice President: $455,000, with reported total compensation of $1,884,709.
(2) Craig B. Spray, Treasurer: $210,000, with reported total compensation of $875,738.
(3) John C. Frazer, Secretary: $54,100, with reported total compensation of $490,469.
(4) Tyler Schropp, Executive Director, Advancement: $75,000, with reported total compensation of $870,013.
(5) Doug HamlinExecutive Director, Publications: $100,000, with reported total compensation of $696,414.


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