The 2018 990 tax return for Toastmasters International has been released. Total revenue was up 10.0%, and expenses were down 4.0%.  Total salaries were down 12.9% (34% of all expenses, down from 37% in 2017), even though the number of employees is up from 181 to 236 (up 30%, partly a recovery from staff loss during the Denver move the previous year).

Expenses and vendors

• Payroll (including all related expenses, like benefits and pensions) was by far the largest single expense, at $13.4M (but down by 12.9% from 2017).
• District expenses were $8.7M (down 16%).
• The magazine cost $2.8M (down 3%).
• Depreciation added up to $1.4M (61% higher).
• Insurance was $1.2M (down 14%).
• Software cost $1.2M (up 49% from $833K; this may or may not include Cornerstone, as they’re a vendor).
• Transportation (apparently different from “travel”) cost $1.1M (and was not listed in the 2017 return).
• Travel was $1,017K (up 12% from $908K).
• Credit card fees were $1,000K (unchanged).

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, $832K (down from $1,061K previous year)
• East Asia/Pacific, $1,998K (was $1,936K)
• Europe, $595K (down from $860K)
• Middle East/North Africa: $461K (down from $742K)
• Central America/Caribbean: $79K ($66K)
• Sub-Saharan Africa: $329K ($397K)
• South America: $6K (was $8K; the decrease is surprising given the focus on growing clubs in Brazil)
• South Asia: $306K (was $385K)

The five largest vendors for Toastmasters were:

• RR Donnelley & Sons, $5.1M for logistics (most TI store sales)
• Cornerstone Ondemand, $660K (the Pathways web site)
• Freeman Audio Visual, $617K (convention A/V)
• Velosio LLC, $538K (“technology services”)
• Marquis Innovation, $522K (Chicago convention services)

24 more companies were paid at least $100K (each) in 2018.

Employee compensation

Staff paid over $100K/year must be reported (per U.S. non-profit tax law), listed below. This year, some employees (not specifically 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).

This year, for the first time, it appears most of the people listed below received a bonus or incentive payment (in 2017, only Dan Rex and Jennifer Quinn received such payments). Interestingly, many of these staffers are showing flat or even a small decrease in base compensation, probably a result of the lower cost of living in Denver, compared to the former WHQ location in Orange County.

• CEO Dan Rex, $429K base compensation (4.5% decrease) plus a $66K bonus (15% of base), for $574K total compensation (7.9% decrease)
• Chief financial officer John Bond, $419K total comp (58% increase, mostly in “other compensation”, likely a relocation package; base comp is essentially unchanged)
• Chief information officer Hamidreza (Sam) Farajian, $409K total comp (21% increase, also mostly in other comp (relocation), base comp is down 12%)
• Chief operations officer Sally Newell, $358K total comp (down 4%, includes a $125,000 in “other” compensation, and the compensation schedule indicates at least one person received a severance payment, probably her since she left Toastmasters in August 2018)
• Marketing & communications director William Nissim, $240K (up 30%, but base comp is only up 5%)
• Chief member engagement officer Darci Maenpa, $220K (down 2%, but base comp is essentially unchanged)
• IT manager – enterprise architect Sean Mattox, $209K (new to the list)
• Controller Margaret Yamamoto, $191K (up 22%, but base comp is up only 2%)
• Application services IT director Nader Hariri, $181K (up 2.3%; base comp is down 3%, but he received an 8% bonus, the highest percentage other than Dan Rex)
• Business enablement manager Gary Maziarz, $180K (new to the list)
• Business data analyst Neyra Espinoza, $166K (new to the list)
• Executive and board relations director Jennifer Barr (was Quinn), $153K (down 33%, but 2017 included $83K for other/relocation; base comp is essentially unchanged; she left Toastmasters in March 2019)
• Senior product development manager Angela Cunningham, $135K (up 5%)
• Application services manager Sofia Ageyeva, $139K (new to the list)
• Communications manager Diana Passow, $138K (new to the list)
• Publications manager Suzanne Frey, $139K (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 4.6%, to a total of $37.8M.  The Toastmasters district conferences globally took in $3.2M in revenue (down 34%, likely due to eliminating the October/November district conferences, an average of about $9 per member).  The annual convention pulled in $1.2M (down 2% from 2017).  For materials sold, the sales revenue only covered half the cost, resulting in a 51% loss on sales. In 2017, the loss was 6.8%, while in 2016, there was an 18.2% profit margin

Total assets grew by 2.1%, to $52.9M, of which $24.9M is cash and investments, equal to 0.63 years of expenses (up from 0.52 years in 2017, 0.56 years in 2016, and 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 $25.9M (down 8.5%).  Inventory has decreased by another 13% (after decreasing by 8% in 2016), to $691K.

Net assets grew by almost $4M (10.7%), mostly due to savings and temporary cash investments growing by $3.8M and accounts payable and accrued expenses shrinking by $3.6M (other smaller shifts canceled some of this out).

Donations to Toastmasters International totaled $104K, compared to $76K in 2017 and $40K in 2016 (likely a result of the new marketing of the Smedley Foundation). Donations over $5K must be reported, and two donors met the threshold. F. Dian Prasko of Colony, Kansas, donated $5K (she apparently passed on in November 2018), and the Homer N Allen Charitable Trust of Madison, Florida, donated $25K (details on the trust here).

Related organizations

Two organizations are identified as related, “Toastmasters International Singapore Ltd” and “Toastmasters International (Hong Kong) Ltd”, both companies for “legal and compliance administration” (also controlled by TI).

Click here for the full 2018 tax return.

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