The National Rifle Association plugged a massive gap in its 2022 budget with tens of millions in debt.
However, even after tapping its line of credit to the tune of $23.6 million, the NRA still ran an $11.6 million deficit, according to an internal budget document obtained by The Reload. The substantial borrowing came despite the group’s 2022 budget anticipating paying down the same line of credit by $10 million. An apparently unexpected drop in membership revenue and jump in legal costs forced the gun-rights group further into debt.
The reliance on debt to plug a huge hole in the NRA’s budget may become more challenging to do as its revenues decline. Without a turnaround in the group’s membership woes, it can only forestall further cuts to core services for so long.
Rocky Marshall, a former NRA board member and critic of current leadership, claimed the group is already approaching the limit of what it can borrow. He argued the group is likely headed toward an untenable situation.
“This downward spiral is likely to accelerate as more members become disgusted with the corruption and misuse of donations by Wayne LaPierre, management staff, and the Board of Directors,” Marshall told The Reload.
Brian Mittendorf, an accounting professor at Ohio State University who studies the NRA, agreed the organization’s finances are in dire straights.
“Their financial performance and lack of other revenue sources have demonstrated how little margin for error their business model has,” he told The Reload. “The way things have developed, they run the risk of a downward spiral that is hard to reverse, a cycle that would result in the organization becoming a shell of its former self.”
The NRA did not respond to a request for comment.
Mittendorf said a line of credit can be an “effective means” for a group the size of the NRA to deal with “short-term cash fluctuations.” But it can also become an unsteady crutch when misused.
“If, instead, such short-term borrowing becomes a means of avoiding addressing more sustained cash shortfalls in their budget, something will give way quickly,” Mittendorf said. “Only so much can be borrowed before no more will be lent, and a revenue shortfall becomes an inability to pay bills.”
To that end, the NRA projects the group won’t use its line of credit at all in its 2023 budget. Instead, without explanation, it forecasts a 21 percent increase in membership revenue. Combined with a nearly $20 million assumed drop in legal costs, the NRA plans to break exactly even in pre-investment revenue and expenses.
But the NRA’s recent budget projections have missed by wide margins. If the group’s rosy predictions don’t come through in 2023, the group will once again be forced to plug the gaps in some way.
Still, Mittendorf said the NRA’s “membership base remains relatively strong.” He believes there is still time for the group to turn things around.
“Rather than a huge dropoff, they have seen more of a slow trickle of member revenue declines,” he said.
Marshall, on the other hand, thinks insolvency is becoming unavoidable.
“Most companies that eventually file bankruptcy are primarily driven by the cash flow of the operation,” he said. “The NRA will likely follow suit and be forced into bankruptcy in the coming months because the expenses are significantly outpacing the revenues.”
6 Responses
That’s probably why they’ve been calling 1 or 2 times a week for donations. I’ve been a life member for years and they’ve really had an uptick in donation requests lately. I tell them to “Fire Wayne” before they get a penny from me. I feel bad for the callers on this one.
I’ve had hundreds of people tell me the same thing over the past few years.
Stephen, thank you for your consistent reporting on NRA inner workings. Many of us have been concerned for several years that NRA headquarters needs a wholesale overhaul. The departure of Ollie North was perhaps one of the most visible bits of evidence that something was seriously wrong. We have been an NRA recruiter since we opened in 2004, and the number of new and renewal memberships has fallen dramatically. As an NRA certified instructor, I have to maintain my membership, but that has long since stopped being a revenue source for the association. I don’t get many calls anymore because my first question to the caller is always, “Has the Board of Directors fired Wayne LaPierre yet?” When the response is “No,” I suggest they call back after that happens.
The fact that the Board members have been so spineless is a serious concern. They have to realize why there are such serious financial problems but have done nothing to solve the core problem. We are now in the next election cycle. It’s not really a stretch to believe that those who screen the candidates are only allowing those who will continue to vote to keep LaPierre in his position to be on the ballot. Mounting a write-in campaign to place members with integrity to the board is almost impossible.
It seems the rot goes pretty deep. I hope the Association survives what it takes to clean it out. I’m not optimistic.
Yes, that’s exactly how the board nomination process appears to work. It’s highly unlikely the NRA will change course on its own.
I dropped out of the”buy Wayne an expensive suit” club 2 years ago and diverted my donations to The Second Amendment Foundation. I have since become a Life Member and increased my overall giving because of the excellent work they have been doing. At least there are tangible results from my money as reported by the Reload.
When they’ve phoned for donations or mailed renewals to me (I’m already a Life Member), I’ve responded that they fire WLP & Wife (she has done her small part in accepting the corruption)
When NRAInDanger noted recently that over 1 million was transferred from the ILA to, I’m guessing, an NRA general-type fund, I finally had enough. For a little while, I figured at least the ILA was untouched.
Are the state-affiliates uncoupled from WLP, Millie, Woody, et.al.? I will stop giving to the state-affiliates as well if not. Then the banks can finally, pragmatically and capitalistically, say “no soup for you!” Maybe then the BoD will throw WLP And That Company out, and themselves on the mercy of the bankruptcy, criminal, and civil courts.