For Release: Wednesday, March 19, 1997
NRA’s $50,000,000 Deficit Revealed, Power Struggle for Control of the Organization Expands and Goes Public
Organization Sells “Crown Jewels” at “Fire Sale”
The National Rifle Association (NRA) has been “technically insolvent for several years,” buoyed only by “fund raising miracle[s]” such as “fortuitous unrealized gains from the stock market” and a “one time fire sale of upgrades in membership class” according to a December 7, 1996 “special report” of the organization’s Finance Committee. According to the internal document, the “NRA’s net worth (assets minus liabilities) shows a deficit in excess of $50,000,000.” Much of this stems from “a fall in revenues due to declining membership and contributions from members” since mid-1995. The “special report” warns, “The unprecedented rate of the liquidation of the Association’s assets over the last five years, used to meet current obligations while future liabilities were increasing; leaves the Association without a cash cushion and few options.” [Copies of the “special report” as well as related documents are available from the Violence Policy Center (VPC).] According to the “special report”
- “…the NRA has been technically insolvent for several years, while at the same time the Association has incurred substantial debt, continual operating losses concurrent with significant capital spending outlays, and (since mid 1995) a fall in revenues due to declining membership and contributions from members. The unprecedented rate of the liquidation of the Association’s assets over the last five years, used to meet current obligations while future liabilities were increasing; leaves the Association without a cash cushion and few options.”
- “…major factors in improving the financial results were not fundamentally obtained by operations, but by fortuitous unrealized gains from the stock market which could just as easily become losses and by funds derived from, and almost exclusively driven by, a fourth quarter (one time) fire sale of upgrades in membership class (to Endowment, Patron, and Benefactor) by offering significant discounts for those memberships….”
- “Promotions such as the recent membership class upgrade fire sale are, in effect, a continuation of the asset liquidation mode the Association has been engaged in over the last several years. It is nothing more than a sell off of a soft asset (recognizing that our members and their good will are the crown jewels of the Association).”
- “…efforts at cost containment are not keeping pace with falling net revenues resulting from declining membership and member contributions which in turn produces quarterly losses on budgeted costs incurred, requiring fund raising miracles in an attempt to balance the income statement.”
The “special report” was made available on internet mailing lists and is the latest salvo fired by factions supporting NRA First Vice President Neal Knox in his efforts to unseat NRA Executive Vice President Wayne LaPierre and take control of the organization. (It is expected that Knox’s efforts to unseat LaPierre will come to a head at the organization’s annual meeting of members in Seattle, Washington on May 2nd.) The authenticity of the document was confirmed by the publication The New Gun Week, which quotes NRA President Marion Hammer as stating, “Whoever posted that document and made it available for such use should be held responsible. Its posting is part of an orchestrated drill to attack the executive vice president [LaPierre] and the president [Hammer].” In a separate article, The New Gun Week also notes, “Sources in contact with top GOP House leaders report…that little action can be expected in Congress from pro-gun representatives while there is uncertainty regarding the [NRA’s] future….They compare the current situation to that of negotiating with a third-world country engaged in a civil war.”
The “special report” also details the authorization of $3,000 for the establishment of a sub-committee headed by Neal Knox to “study the reasons for the decline in membership.”
Violence Policy Center Executive Director Josh Sugarmann states, “First the NRA’s leadership murdered its parents. Now it’s eating its children. The extremist positions staked out by the NRA’s leadership are taking their toll in dollars and cents. It is clear that even the NRA’s own members can’t stomach the leadership’s extremist anti-public safety, anti-law enforcement rhetoric and actions.”
About the Violence Policy Center
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