NRA – A Social Enterprise?

A Lesson in Brand Leverage

NRA; A Social Enterprise?  Definition: A nonprofit venture that combines the passion of a social mission with the discipline, innovation, and determination commonly associated with for-profit businesses. Suitability: NRA was established “to fund firearms, hunting safety and educational projects of benefit to the general public”.

NRA (love ‘em or hate ‘em), boasts membership of 4.3 million loyal fans and advocates.  Their 2012 Annual General Meeting had 73,740 attendees, whereas the Oracle of Omaha, Warren Buffett (Berkshire Hathaway) had 40,000 attendees!

Formed in 1871, to foster firearms skills, the National Rifle Association became active in the promotion of marksman skills at the collegiate-level in early 1900s.  Post WW II saw the American public embrace the pastime of hunting in the “new” economy of the day.  In 1950s Police Firearms Training was introduced, followed in 1973 by the release of The American Hunter magazine, the first new publication in over 60 years of leadership with American Rifleman Magazine.  25 years later and further leaning toward a political movement, the launch of The American Guardian (later renamed America’s 1^st Freedom) debuted in 1997.

Revenue as reported on NRA website has compounded at 5.73% annually for last 23 years of available data.

1986                                                      $66,000,000
1994                                                    $150,000,000
2004                                                    $205,400,000
2009 (last year for data)                            $237,500,000+

The NRA has raised and distributed over $160,000,000 to their cause.

In 1990 The NRA Foundation was established – obviously to capitalize on the immense membership draw the NRA has, currently at 4,300,000 registered members.  At $35/year, or $1,000 “lifetime” membership, it is easy to see how the NRA boasts revenue last year of over $237,500,000.

But membership doesn’t account for all the revenue – these savvy business experts run over 16 programmes that funnel revenue to the NRA including:

The Endowment Funds were started in 1994 and at 2009 (last date for data) has $31,387,051 invested in permanent endowments (66% stocks, 31% bonds and 3% cash).  The Endowments have provided grants exceeding $5,179,000 to the above-mentioned fields of support.  Fundraising expenses amounted to 46% of donations received.

In terms of leveraging their brand, the NRA has magazines, television show, apparel, accessories and full online store, memberships (over 4.3 mln) and other brand engagement strategies they use very effectively in building radical levels of support and insulating their members from competitors.  The NRA features 20 “other” NRA websites they control content and drive their message through.

NRA has morphed from their original goal of providing firearm, hunting safety and educational projects – but they do indeed still do this to a very great extent.  My gripe (through the lens of a non-profit) is the homepage is dedicated to kicking President Obama out of the White House – period.  That is 100% political.  The NRA is designated a “lobby” non-profit but the Foundation is not – and the defeat of President Obama in the upcoming election is completely congruent with the NRA’s vision but falls into a no-man’s land regarding their mission and core values – and may start alienating less political members or could be shied away from due to radical values.

Recently, NRA has been considered a major political force and no longer a gun-owner group.  They are recognized as one of, if not the most powerful lobby group in the United States.  When you donate, you’re not donating for gun safety or recreation, in fact, “More than ever before, Americans are looking to NRA to lead the fight for freedom — to challenge the lies they’re hearing every day from the dishonest media and politicians who are dragging this country down.”   On May 8, 2012, NRA released a statement regarding Indiana primaries vote, “Sen. Lugar has become notorious for his zealous support of gun control schemes and his fervent anti-gun positions”, “Your NRA was fully vested in this race with a comprehensive campaign”, “Thanks to Indiana gun owners, one of the most anti-gun Senators will no longer be in the U.S. Senate.”  This appears on the NRAPVF.org (yes, the PVF stands for Political Victory Fund).

Will this political strategy work for the longevity of their membership, or the very mission the National Rifle Association was founded on?  Time will tell.  The very fact this “mission” has grown for over a century (141 years to be exact) is a testament where at the very best recognizes the All-Americanism hobbies of shooting and hunting as recreation – to the polarization of gun advocacy vs. gun control and the dual party system in the USA.

The “brand” of the NRA is alive and well, no less than the culture that surrounds Harley-Davidson – tattoos and badges adorn skin, vehicles, clothing selections and pastimes.  You can literally support a majority of your daily needs and wants through an NRA affiliate corporate sponsor where reciprocal benefits are shared among the like-minded individuals for the preservation of their mutual interests.  No fewer than 37 links to member discounts appear on the NRA website.  Over 1 million Harley-Davidson owners proudly participate in H.O.G. (Harley Owners Group®), and unlike the NRA, Full Membership into HOG requires your Harley’s VIN, and Associate Memberships require a sponsoring member number.  HOG members receive benefits too – and they can support their own Foundation, The Harley-Davidson Foundation.

In contrast however, the most important benefit of NRA membership, according to their website, is the defense of your Constitutional right to keep and bear arms. NRA-ILA tracks the issues and alerts members about legislation involving firearms and hunting at the federal, state and local levels of government. Successful legislative action begins with you — the individual member…

The actionable message of this article is intended to be organizations have brand value and can leverage this into very strong and resilient businesses with perpetual revenue capacity that can work with their donor-side of charitable funding.  Case in point, I estimate nearly 1/3 of the annual revenue is derived from what can be termed Social Enterprises the NRA conducts, with 2/3 still coming from support/donations in the form of membership fees.  There is no doubt in my mind that NRA will continue to flourish as a revenue-generating entity with most of this future revenue channelled through their Foundation arm.  Demographics and Planned Giving opportunities abound for gun owners and/or defenders of the 2^nd amendment to “leave a legacy”. 

In my opinion, there is a vast grey area in the NRA Foundation’s mission as it pertains to defending rights, “The NRA Foundation, Inc. (“NRA Foundation”) is a 501(c)(3) tax-exempt organization that raises tax-deductible contributions in support of a wide range of firearm-related public interest activities of the National Rifle Association of America and other organizations that defend and foster the Second Amendment rights of all law-abiding Americans.”

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R. Brent Lang, CIM FCSI, is active in the fields of finance and philanthropy.  He has received recognition as subject-matter specialist in finance and philanthropy, and has been interviewed and referenced in numerous articles published by MSN Money, Global Finance, Top MBA CONNECT, Smart Money (WSJ), The Scrivener, Charity Village, Change Strategists, Metanoia Magazine, Canada.CreditCards.com, The Work Style Magazine, and myriad local publications.

He enjoys contributing to nonprofit organizations with an emphasis on social entrepreneurship, planned giving, and community relations.

R. Brent Lang can be reached at rbrentlang@gmail.com