The 2017 990 tax return for Toastmasters International has been released. Total revenue was up 16.5% (this was the first full year of the 25% dues increase, from $36 to $45), but expenses were up 11.7%.  Total salaries were up 18.9% (37% of all expenses, up from 35% in 2016), and the number of employees is down from 198 to 181 (down 9%).

Expenses and vendors

Payroll was by far the largest single expense, at $15.4M (up 19%).  Travel expenses are down, from $1,195K in 2016 to $908K in 2017.  $894K was spent on postage, $833K was spend on software, $476K on property taxes, $464K on “new member charter kits”, $334K on audio/visual, and $306K on training and development.

Expenditures on club-building and leadership training by world (not TM) region are interesting, it does cost significantly more to support members outside of North America.

• North America, $1061K (up 16% from $917K last year)
• East Asia/Pacific, $1.9M (unchanged from last year)
• Europe, $860K (up from $681K)
• Middle East/North Africa: $742K (doubled from $361K)
• Central America/Caribbean: $66K ($68K)
• Sub-Saharan Africa: $397K ($309K)
• South America: $8K ($13K)
• South Asia: $385 ($149K)

The five largest vendors for Toastmasters were:

• Asendia USA, $2.1M for printing and publishing (up from $1.9M last year)
• Walsworth Print Group, $2.1M for printing and mailing (up from $1.7M last year)
• I2 Construction, $661K for construction (new WHQ)
• Andovar PTD LTD in Singapore, $531K for language translation (not listed last year)
• Vancouver Convention Center, $441K (2017 annual convention site)

23 more companies were paid at least $100K in 2017.

Employee compensation

Staff paid at least $100K must be reported, and they were as below. This year, some employees (not identified) received relocation benefits (which were grossed up to cover taxes) or retention incentives to stay on until the move (all included in the total compensation reported below).

• CEO Dan Rex, $582K salary (45.1% increase) and $624K total compensation (41.3% increase)
• Chief operations officer Sally Newell-Cohn, $345K total comp, up 8.5%
• Chief information officer Sam Farajian, $339K, up 4.3%
• Chief financial officer John Bond, $265K, up 7.3%
• Executive and board relations director Jennifer Quinn, $230K, up 65%
• Chief member engagement officer Darci Maenpa, $216K, up 7.5%
• Marketing & Communications Director William Nissim, $185K, up 4.5%
• Application services IT director Nader Hariri, $177K, up 16.4%
• Controller Margaret Yamamoto, $156K, up 7.6%
• Research and business development director Heather von Raesfeld Carter, $156K, up 5.4%
• Education program director Carol Gregory, $156K, up 2.6%
• Senior product development manager Angela Cunningham, $128K (new to the list this year)

The CEO’s compensation was established using a compensation committee, the form 990 tax return from other organizations, a written employment contract, a compensation study or survey, and approval by the board or compensation committee (per the tax return, Schedule J).  (The tax form includes one other method for determining compensation which is not used by TI, an independent compensation consultant.)

Expenses did include paying for first-class or charter travel, travel for companions, and tax indemnification/grow-up payments (per the tax return), following a written reimbursement policy, and requiring substantiation of expenses.

Revenue and assets

Total program revenue was up by 14.5%, to a total of $39.6M.  The Toastmasters district conferences globally took in $4.9M in revenue (an average of about $13 per member).  The annual convention pulled in $1.2M (down from $1.3M in 2016, but the same as 2015).  Magazine advertising earned $20K (unchanged).  For materials sold, there was a negative profit margin of 6.8% (down from an 18.2% profit margin in 2016, perhaps from writing off traditional education program materials).

Total assets grew by 7.0%, to $51.8M, of which $21.4M is cash and investments, equal to 0.52 years of expenses (down from 0.56 years in 2016, which was down sharply from 1.2 years in 2015), below the range of the recommendation for non-profits to have 1-2 years of expenses saved up in reserves.  The land and building at WHQ is valued at a net of $28.3M.  Inventory has decreased by 8%, to $793K.

Donations to Toastmasters International totaled $76K, compared to $40K the previous year (likely a result of the new marketing of the Smedley Foundation). This year, no one person gave $5K or more (which would have to be reported by name).

Related organizations

Two organizations are identified as related, “Fifteen to Seventy LLC”, a real estate holding company in Colorado (100% owned by TI, a vehicle for buying the new office), and “Toastmasters International Singapore Ltd”, a company for “legal and compliance administration” (also controlled by TI)

Click here for the full 2017 tax return.

2016 tax return analysis
2015 tax return analysis
2014 tax return analysis
2013 tax return analysis
2012 tax return analysis
2011 tax return analysis