Inside your trade associations -- SNEWS looks at 2007 tax returns

SNEWS has been studying Form 990 returns for most of our industry associations since 2003, and, after a number of requests for information to our offices about various association numbers, we decided to take a much-condensed peek at leading outdoor, fitness and sporting goods associations, compiled for your viewing pleasure in one document. Here, you will see major sources of revenue, select expenditures, executive compensations, payrolls, and lobbying expenses (if any were reported).
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There are numerous ways to evaluate a trade association's work on behalf of its industry and members, as well as ways to analyze its health, both fiscally and organizationally. Most associations do a great job of reporting, as long as it is reporting good news, government affairs, trade shows, public relations efforts or other happenings on behalf of memberships.

Where associations tend to stumble a bit is in opening their books, sometimes trying to be somewhat coy about what goes on behind closed doors. Members, however, deserve to have full accountability, including knowing how their membership dollars are being spent so they can help effect change should change be needed. Never forget that associations are, after all, working for and on behalf of an industry, not the other way around.

Though non-profit associations may not like IRS regulations very much, as of June 8, 1999, all 501(c) organizations are required by law to provide copies of their three most recent Form 990 (IRS tax return) to anyone who asks for them.

SNEWS has been studying Form 990 returns for most of our industry associations since 2003, and, after a number of requests for information to our offices about various association numbers, we decided to take a much-condensed peek at leading outdoor, fitness and sporting goods associations, compiled for your viewing pleasure in one document. Here, you will see major sources of revenue, select expenditures, executive compensations, payrolls, and lobbying expenses (if any were reported). If you so desire, you can always pull full reports on each association and any non-profit, by going to www.guidestar.org.

Now, one word of caution… OK, a couple of words of caution…. These returns are not audited numbers. We presume them to be accurate since they are IRS tax returns, but as we all know, those filling out tax returns are not infallible. Too, this is only one snapshot and one piece of information and it would be very dangerous to jump to any conclusions or judgments about how good an association is, or not, based only upon what you read here. Balance this with reports from the association itself about its activities. And then, if you have a question, pick up the phone and ask the association how your money is being spent or why it appears it is spending it in one way when you would like them to spend it in another. Naturally, if you aren't a member of the association you are wishing to criticize, your words will have decidedly less value.

Finally, although we report on PIA (Paddlesport Industry Association) numbers, we are not reporting TAPS (Trade Association of Paddlesports) numbers here, simply because TAPS did not have Form 990's on file and the comparison would not be apples-to-apples and in our view then, somewhat unfair, TAPS does have very detailed financial reporting on its website which can be viewed by clicking here.

International Health, Racquet & Sportsclub Association (IHRSA)

*IHRSA's tax year is reported from July 1 to June 30 each year, so the 2007 report is through June 30, 2007.

Founded 1994

www.ihrsa.org

Program Service Revenue -- $12,475,875 (up from $12,247,790 in 2006)

Includes $8,162,509 from trade shows and events, $3,247,760 from advertising, up from $7,605,213 in trade show and event revenue and $3,175,166 in advertising revenue reported in 2006.

Membership Dues Revenue Reported -- $2,585,880

Net Assets Line 21 -- $1,300,027 (up from $1,185,812 in 2006)

Compensation of current officers -- $501,740 (down from $666,829 in 2006)

Joe Moore, president/CEO, was paid $260,735 + $12,723 in benefit plan contributions

Anita Lawlor, CFO/COO, was paid $207,614 + $20,668 in benefit plan contributions

Compensation of former officers -- $116,654 (up from $0 reported in 2006)

John McCarthy, now retired, was paid $88,342 + $14,156 in benefit plan contributions

E. Rickert Devereux was paid $14,156 in benefit plan contributions

Salaries / Wages -- $4,358,031 (up from $4,102,099 in 2006)

Consultants -- $123,850

Lobbying / Political Expenditures -- $478,422 (up from $412,746 in 2006)

IHRSA, which runs several trade shows during the year including an annual international show each spring, plus magazines, publications and other programs, reported $3,626,609 in trade show and event expenses, against $8,162,509 in revenue, for a healthy $4,535,900 in profit, according to the tax return. Its publications are also apparently quite profitable, reporting $3,175,166 in ad revenue against $2,368,977 in expenses for a profit of $806,189.

National Association of Sporting Goods (NSGA)

*NSGA's tax year is reported from April 1 to March 31 each year, so the 2007 report is through March 31, 2007.

Founded 1976

www.nsga.org

Program Service Revenue -- $453,763 (up from $452,984 in 2006)

Includes $385,595 from education and conferences and $33,885 from publications revenue.

Membership Dues Revenue Reported -- $218,216 (down from $232,559 in 2006)

Net Assets Line 21 -- $40,904,303 (up from $39,829,800 in 2006)

Compensation of current officers -- $655,109 (down from $665,491 in 2006)

Jim Faltinek, president and CEO, was paid $491,593 + $17,257 in benefit plan contributions; William Webb, CFO, was paid $127,064 + benefit plan contributions of $19,195

Salaries / Wages -- $1,006,024 (up from $963,821 in 2006)

On the revenue front, NSGA has invested wisely, garnering, according to its 2007 tax return, $1,869,495 from dividend and security interest. It also continues to derive strong revenue from its team dealer and management conferences, as well as sales of its industry surveys and reports and service guides for which it has become known.

Outdoor Industry Association (OIA)

*Tax year reported is from Jan. 1 through Dec. 31, so the 2007 report is through Dec. 31, 2007

Founded 1991

www.outdoorindustry.org

Membership Dues Revenue Reported -- $745,183 (up from $535,427 in 2006)

Net Income From Special Events -- $236,333 (up from $200,830 in 2006)

Other Revenue -- $1,315,480 (up from $255,687 in 2006*)


Net Assets Line 21 -- $986,122 (up from $878,688 in 2006)

Compensation of current officers -- $206,374 (up from $202,505 in 2006)

Frank Hugelmeyer, CEO, was paid $133,525 + $23,341 in benefit plan contributions;

Lori Herrera, CFO, was paid $72,849 + benefit plan contributions of $17,308

Salaries / Wages -- $617,728 (up from $539,251 in 2006)

Contract Labor -- $419,344 (up from $335,219 in 2006)

Lobbying / Political Expenditures -- $291,506 (up from $268,267 in 2006)

In addition, OIA reported OIA Services Inc. revenue of $336,391, as well as Outdoor Industry Foundation revenue of $666,485 (which means Outdoor Retailer contributed another $333,000 to OIA for a total estimated 2007 payment to OIA of $1.6 million).

*The other revenue reported above is attributed to Outdoor Retailer Summer and Winter Market trade show revenue share we would surmise based on a percentage of show revenues. While it is a bit harder to decipher what Outdoor Retailer paid OIA in 2006, it would be safe to assume that much of the $255,687 “other revenue” line item is attributed to Outdoor Retailer. The company also was on the hook for OIF matching funds, so half of the $636,000 would mean an additional $315,000 can be traced to Outdoor Retailer. Insiders told us several years ago that there was a significant jump in revenue from 2006 to 2007 due to an expansion of the Salt Palace, as well as other contractual changes that began in 2006.

Paddlesports Industry Association (PIA)

*PIA's tax year is from Jan. 1 through Dec. 31, so the 2007 report is through Dec.31, 2007

Founded 1972

www.paddlesportsindustry.org

Membership Dues Revenue Reported -- $99,552 (down from $105,535 in 2006)

Other Revenue -- $14,771 (down from $38,881 in 2006)


Net Assets Line 21 -- $86,774 (up from $69,005 in 2006)

Compensation of current officers -- $69,400 (down from $72,000 in 2006)

Matt Menashes, president/CEO, was paid $69,400 + $2,306 in benefit plan contributions

Salaries / Wages -- $32,885 (up from $5,459 reported in 2006)

Snowsports Industries America (SIA)

*SIA's tax year is reported from June 1 to May 31 each year, so the 2007 report is through May 31, 2007.

Founded 1978

www.snowsports.org

Program Service Revenue -- $4,556,166 (up from $4,418,948 in 2006)

Includes $4,083,471 trade show revenue and $472,695 publication sales revenue, up from $3,959,480 trade show revenue and $459,468 revenue in 2006

Membership Dues Revenue Reported -- $929,250 (down from $966,850 in 2006)

Net Assets Line 21 -- $6,339,436 (up from $5,927,815 in 2006)

Compensation of current officers -- $207,400 (down from $234,000 in 2006)

David Ingemie, president, was paid $207,400 + $13,331 in benefit plan contributions.

Salaries / Wages -- $1,100,018 (up from $1,022,621 in 2006)


Contract Labor -- None reported by SIA

Lobbying / Political Expenditures -- SIA did not report any lobbying expenses

Investments / Publicly Held Securities -- $6,161,519 (up from $5,624,572 end of 2006)

In an explanation of expenses for 2006, SIA lists $1,855,758 spent running its annual trade show, $1,268,701 spent on member services including surveys, market research, trade publications and assistance provided to “approximately 580 snowsport industry retailers and members of SIA.” In addition, $179,621 was spent on public relations and educational programs. Of note, the expense ledger in 2006 reported member services expenses totaled $1,154,401, which is less than in 2006, but it lists 680 retailers and SIA members -- significantly more members served.

Calculating the profit of the trade show, SIA realized a net profit of $2,227,713, according to the tax report -- clearly an essential component of SIA's revenue.

Sporting Goods Manufacturers Association (SGMA)

*Tax year reported is from Jan. 1 through Dec. 31, so the 2007 report is through Dec.31, 2007

Founded 1944

www.sgma.com

Program Service Revenue -- $454,952 (down from $1,009,807 in 2006)

Includes $544,993 from the SGMA's partnership with Sports Business Research, $84,500 for media services, $39,568 in event revenue, and a charge of $214,109 attributed to Super Show -- now defunct.

Membership Dues Revenue Reported -- $884,704 (up from $853,639 in 2006)

Net Assets Line 21 -- $8,943,144 (up from $7,589,060)

Compensation of current officers -- $676,803 (up from $633,170 reported in 2006)

Tom Cove, CEO, was paid $353,753 + $37,656 in benefit plan contributions;

Bill Sells as vice president was paid $121,406 + benefit plan contributions of $26,916;

Gregg Hartley, vice president, was paid $113,082 + benefit plan contributions of $23,990.

Salaries / Wages -- $576,595 (down from $646,479 reported in 2006)

Lobbying / Political Expenditures -- $110,432

Much has changed for SGMA since the demise of The Super Show in January 2006 after 21 years. On SGMA books in 2006, it still had revenues of $574,731 from The Super Show, as well as $255,525 in events, most notably from the launch of the Sports+Technology Convergence in San Diego that year. In 2007, the Sports+Technology show was forced to cancel just days before when wildfires whipped through the area (and it has not been brought back) and the first (and last) SGMA Spring Market show was held. Changes were in the wind, marking a major turning point in this association's structure, purpose and revenue model.

--Michael Hodgson

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