The National Rifle Association’s financial struggles have deepened.

The nation’s largest gun-rights group saw its revenues decline and was forced to sell off a substantial amount of its assets early this year, according to a copy of the NRA’s 2023 annual report obtained by The Reload. The report shows membership dues were down $21.4 million compared to 2022, settling at $61.8 million. Contributions were also down $15.8 million, ending at $93.7 million.

The group experienced an overall year-over-year revenue drop of $60.5 million. Despite cutting $34.3 million in expenses, the NRA ended 2023 spending $26.8 million more than it brought in. That deficit is likely what drove the group to liquidate $44.6 million of assets to pay off a line of credit and fund its operating account, according to a disclosure in the report.

Given the organization’s decades-long leading role in gun-safety training and gun-rights advocacy, the NRA’s continued decline has broad implications for American gun culture and politics. Brought on in large part by revelations that former CEO Wayne LaPierre diverted millions of the charity’s money toward lavish personal expenses and the ongoing legal fight over those revelations, the NRA has been losing members and revenue for half a decade. If it’s unable to reverse that trend, it could be forced to further curtail its operations or even shut down altogether.

The NRA turned its ire over the downturn on New York Attorney General Letitia James (D.), who has publicly labeled the group a “terrorist organization” and just secured a jury verdict against it for failing to safeguard its assets.

“The NRA has been involved in an existential battle after being politically targeted by the New York Governor and Attorney General since 2018,” the NRA said in a statement sent to The Reload by public affairs official Nick Perrine. “We make no apologies for doing whatever we must to preserve this 153-year-old organization and the Second Amendment for law-abiding Americans. We are confident that justice and the NRA will prevail.”

Legal fees associated with the New York case and the other controversies that have erupted since the NRA’s corruption scandal began continued to dominate its budget in 2023. The group spent $48.2 million on administrative legal, audit, and taxes, making it once again the top line item in the NRA’s entire budget. Those legal fees ate up more of the group’s budget than its legislative, public relations, shows, and safety training programs combined.

The NRA’s legal fees also outpaced what it spent on member services and acquisitions, which it cut by over $10 million compared to 2022. Brian Mittendorf, an accounting professor at Ohio State University who has followed the NRA’s financial reports for years, said the continued cuts to member-facing programs are likely creating a negative feedback loop.

“Their members have proven loyal, but there are limits to that loyalty when the main programs are sacrificed, and it seems we’re seeing that play out,” he told The Reload.

He said the combined annual report also undersells how much trouble the NRA’s membership organization, the 501(c)(4) that provides most activities the group is known for, because it includes the financials for five of its affiliated entities. After reviewing a copy of its annual report that was obtained by The Reload, he noted the NRA Foundation, a 501(c)(3) that’s limited in what it can spend money on, holds most of the combined organization’s assets.

“The financial woes are concentrated in the membership organization and the apparent rainy day fund of accumulated net assets seen in the consolidated financial statements is really the coffers of the foundation,” Mittendorf said.

The membership downturn has been particularly evident in the group’s Political Victory Fund (PVF). Since it can only fundraise from NRA members, it has faced a harder and harder path in maintaining the scale of the group’s national electoral operation. This April was the worst fundraising hall for the PVF in several election cycles, pulling in just $440,486.01, according to Federal Election Commission records. It was not only again outraised by the collection of its top gun-control opponents but even by the Giffords PAC alone, which brought in $500,574.03.

The NRA noted the PVF is still funded primarily by thousands of small-dollar donors, which suggests it still enjoys a broad base of support. It said it was actively working to build back its membership.

“The average donation amount to NRA-PVF for April was roughly $48,” the NRA told The Reload. “This shows a strong commitment from thousands of grassroots NRA members to be engaged in the political process. That number stands to grow as we work to restore the confidence of past, current, and future NRA members which we serve.”

That work got a potential boost over the weekend at the group’s annual meeting in Dallas, Texas. After former president and current candidate Donald Trump (R.) received the PVF’s endorsement during a speech to a packed room at the group’s Leadership Forum, reformers won a series of leadership elections. They even managed to elect Doug Hamlin, who ran the NRA’s publications, to succeed LaPierre as CEO.

In his first public comments as NRA CEO, Hamlin told The Reload members should expect a “new NRA” that will be “more transparent” while working to be “responsible managers and regain their trust over time.”

He announced an initiative to recruit more members and restore the NRA’s image in his first email to staff on Thursday.

“We will be moving quickly on some digital marketing initiatives to stir up some positive public relations that will hopefully stimulate new memberships,” Hamlin told NRA staffers in an email obtained by The Reload. “Stay tuned for more information on our plans as we develop them.”

Hamlin promised the group’s employees the group would survive the ordeal.

“As we move forward my primary objective is to restore the trust of our members, our industry, our donors, and our staff,” he said. “We are in a tough spot financially but are going to make it.”