The 2020 990 tax return for Toastmasters International has been released. Total revenue was down 25% (with the Covid pandemic starting), and expenses were down even more, at 36%, resulting in a “profit” (revenue minus expenses) of nearly $5M (compared to nearly $1M in 2019).  Total salaries were down 3.5% (52% of all expenses, up from 35% in 2019), even though the number of employees is down from 198 to 168 (down 15%).

Expenses and vendors

• Payroll (including all related expenses, like benefits and pensions) was by far the largest single expense, at $13.0M (down 3.5% from 2019).
• District expenses were down sharply to $3.4M (down 65%).
• The magazine cost was also down sharply with the last printed and mailed magazine in April 2020, at $764K (down 82%).
• Depreciation added up to $1.4M (unchanged).
• Insurance was $1.2M (unchanged).
• Software cost $869K (down 38% from $1.4M; this may or may not include Cornerstone, as they’re a vendor).
• Travel was $343K (down 71%).

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. All regions show sharply lower costs, on average 39% lower.

• North America, $295K (down from $902K previous year)
• East Asia/Pacific, $885K (was $1,988K)
• Europe, $302K (down from $827K)
• Middle East/North Africa: $219K ($678K)
• Central America/Caribbean: $31K ($84K)
• Sub-Saharan Africa: $167K ($387K)
• South America: $7K ($21K)
• South Asia: $200K ($576K)

The five largest vendors for Toastmasters were:

• RR Donnelley & Sons, $2.8M for logistics (down from $5.4M last year, most TI store sales)
• Marriott International, Atlanta, $957K (listed as “hospitality”)
• HPM Inc., Englewood, CO, $872K (for “tenant construction”)
• Cornerstone Ondemand, $725K (down from $922K, the Pathways web site)
• Freeman Audio Visual, $277K (was $284K, convention A/V)

13 more companies were paid at least $100K (each) in 2019.

Employee compensation

Staff designated as key must have compensation publicly reported (per U.S. non-profit tax law), listed below.

• CEO Dan Rex, $409K base compensation (3.3% increase) plus a $8K bonus (2% of base), for $460K total compensation (16.7% decrease)
• Chief information officer Hamidreza (Sam) Farajian, $317K total comp (13% decrease)
• Chief financial officer John Bond, $280K (same as 2019)
• Controller Margaret Yamamoto, $186K (10% decrease)
• Marketing director John Lurquin, $179K (18% increase)
• ERP director Martin Walz, $170K (new to the list)
• HR director Gary Kinser, $166K (4% decrease)
• Partnership and development director Angela Cunningham, $153K (new to the list)

The CEO’s compensation was established using a compensation board committee, the form 990 tax returns 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/gross-up payments (per the tax return), following a written reimbursement policy, and requiring substantiation of expenses.

Revenue and assets

Total program revenue shrank by 22%, to a total of $30.8M.  The Toastmasters district conferences globally took in $242K in revenue (down 93%).  The annual convention (online only) pulled in $6K (down from $1.0M in Denver in 2019).  For materials sold, the sales revenue only covered 18% of the cost, resulting in a massive $2.5M loss on sales. In 2019, the loss was 47%, in 2018 the loss was 51%, while in 2017, there was a 6.8% loss.

Total assets grew by 8.1%, to $59.4M, of which $30.6M is cash and investments, equal to 1.23 years of expenses (nearly double from 0.65 years in 2019, 0.63 years in 2018, 0.52 years in 2017, 0.56 years in 2016, and 1.2 years in 2015), in 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 $25.9M (down 1.9%).  Inventory has decreased by 16% (after decreasing by 13% in each of 2019 and 2018), to $503K.

Net assets grew by $4.5M (8.1%), mostly due to savings/cash growing by $4.3M and investments growing by $804K (other smaller shifts canceled some of this out). Accounts payable shrank by $2.3M and deferred revenue shrank by $1.8M, but a $2.2M unsecured note/load was added to the balance sheet.

Related organizations

Three organizations are identified as related, “Toastmasters International Singapore Ltd”,“Toastmasters International (Hong Kong) Ltd”, and “Shenzen Toastmasters Culture Exchange”, all companies for “legal and compliance administration” (also controlled by TI).

One contributor of over $5K is listed, for $15K, though the name is withheld (as permitted by law).

Click here for the full 2020 tax return.

2019 tax return analysis
2018 tax return analysis
2017 tax return analysis
2016 tax return analysis
2015 tax return analysis
2014 tax return analysis
2013 tax return analysis
2012 tax return analysis
2011 tax return analysis