Analysis of 2021 Toastmasters tax return 990

by Mike Raffety

The 2021 990 tax return for Toastmasters International has been released. Total revenue was down 2%, and expenses were down 7%, resulting in a “profit” (revenue minus expenses) of just over $6M (compared to nearly $5M in 2020).  Total salaries were up 2.9% (58% of all expenses, up slightly from 52% in 2020), even though the number of employees is slightly down from 168 to 163 (down 3%).

Expenses and vendors

  • Payroll (including all related expenses, like benefits and pensions) was by far the largest single expense, at $13.3M (up 2.9% from 2020).
  • District expenses were flat at $3.4M (down 0.5%).
  • Depreciation added up to $1.4M (unchanged).
  • Insurance was down sharply to $122K (from $1.2M).
  • Travel was down again by 70%, to $102K (from $343K).

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, $326K (up from $295K previous year)
  • East Asia/Pacific, $945K (was $885K)
  • Europe, $243K (down from $302K)
  • Middle East/North Africa: $94K ($219K)
  • Central America/Caribbean: $20K ($31K)
  • Sub-Saharan Africa: $239K ($167K)
  • South America: $13K ($7K)
  • South Asia: $400K ($200K)

The five largest vendors for Toastmasters were:

15 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 (unchanged) plus a $66K bonus (16% of base), for $518K total compensation (13% increase)
  • Chief financial officer John Bond, $300K (includes a 7% bonus, total comp up 7% from 2020)
  • Chief information officer Hamidreza (Sam) Farajian (who left in August 2021), $283K total comp (11% decrease, though likely a partial year)
  • Controller Margaret Yamamoto, $182K (2% decrease)
  • HR director Gary Kinser, $176K (6% increase)
  • Marketing director John Lurquin, $171K (4% decrease)
  • Partnership and development director Angela Cunningham, $154K (1% increase)
  • Secretary/education director Kathryn Rynerson, $151K (new to the list)
  • Club quality and member support director Danielle Mitchell, $150K (new to the list)

The CEO’s compensation was established using a compensation committee, a compensation survey or study, and approval by the board or compensation committee (per the tax return, Schedule J).  This year, the tax return indicates that the form 990 of other organizations was not used and that there was no written employment contract, while those boxes have always been checked in recent years. And, this year, for the first time, an independent compensation consultant was used.

Expenses did include paying for travel for companions (as in previous years), and unlike previous years, did not include any first class/charter travel or tax indemnification/gross-up payments (per the tax return). There is a written reimbursement policy, substantiation of expenses is required.

Revenue and assets

Total program revenue shrank by 10%, to a total of $27.7M.  The Toastmasters district conferences globally took in $286K in revenue (up 18%).  The annual convention (online only) pulled in $214K (up from $6K in 2020).  For materials sold, the sales revenue only covered 15% of the cost, resulting in a massive $2.4M loss on sales. In 2020, the loss was 82%, 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 6.4%, to $63.2M, of which $35.4M is cash and investments, equal to 1.53 years of expenses (compared to 1.23 years in 2020, 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 $25.6M (down 1%).  Inventory has decreased by 14% (after decreasing by 16% in 2020, and 13% in each of 2019 and 2018), to $435K.

Net assets grew by $3.8M (6.4%), mostly due to savings/cash investments growing by $6.9M and investments growing by $787K (other smaller shifts canceled some of this out, including apparently zeroing out the cash account for the end of the year, which was $2.9M in 2020). Liabilities are down somewhat, but the $2.2M unsecured note/loan from 2020 is gone. There’s new listings for other liabilities, with gift certificates at $145K, customer deposits at $324K, and lease liability at $86K.

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).

Three contributors of over $5K are listed, with the US Small Business Association apparently “contributing” $2.2M, David Blackwealth (of Pennington, NJ) contributing $6K, and Danny and Dawn Oberst (of Dallas, TX) contributing $10K.

Click here for the full 2021 tax return.

2020 tax return analysis
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

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