Marine Corps League
by Robert
The Marine Corps League, to our great disappointment, never provided the requested Form 990 (tax return), despite an IRS requirement to do so. We made FOUR requests for the information over the past two months, one using the contact form on their website (to which we received an acknowledgment), and three requests directly to the national adjutant/paymaster (who signed the return we found online) via e-mail. Despite her promise to send the requested information a month ago, it hasn't arrived. So we turned to GuideStar, where we found the Marine Corps League's most recent Form 990 covering the fiscal year ending 6/30/2008. The Marine Corps League was founded in 1923 by Major General (and Commandant) John A. Lejeune. It was federally chartered in 1937, which means it is not required to register in the various states. Its national headquarters is located in Fairfax, VA. The Marine Corps League web site lists the following Mission: "Members of the Marine Corps League join together in camaraderie and fellowship for the purpose of preserving the traditions and promoting the interests of the United States Marine Corps, banding together those who are now serving in the United States Marine Corps and those who have been honorably discharged from that service, that they may effectively promote the ideals of American freedom and democracy, voluntarily aiding and rendering assistance to all Marines, FMF Corpsmen and former Marines and FMF Corpsmen and to their widows and orphans; and to perpetuate the history of the United States Marine Corps and by fitting acts to observe the anniversaries of historical occasions of particular interest to Marines." So, let's get down to the details you're interested in. The tax return filed by the Marine Corps League reports the following revenues: Direct Public Support: $358,283 Program Service revenue: Cards, Labels & Notepad sales: $248,809 Marine Corps League News sales: $375,220 Membership dues and assessments: $905,340 Interest on savings & temporary cash investments: $6,511 Dividends & interest from securities: $326,678 Gain (or loss) from sales of assets other than inventory: $-5,160 Net income from special events: $214,794 Gross profit from sales of inventory: $182,055 Other revenue: Credit Card Program: $15,153 Historical Tour & MCL Log: $3,120 Insurance Admin Fees (??): $16,146 Insurance Reimbursements (from Auxillary): $4,300 Mailing Label Program: $1,480 Miscellaneous Income: $4,651 Total revenue: $2,657,380 Now let's take a look at expenses: Grants and allocations: To MCLFoundation for scholarships: $10,000 To Young Marines for programs: $10,000 (We'd like to see both of those numbers higher.) Compensation of current officers, directors & key employees: $227,846 Other salaries and wages: $311,252 Pension plan contributions: $10,997 Employee benefits: $80,570 Payroll taxes: $41,382 Total employee expenses: $672,047 Accounting fees: $21,654 Legal fees: $3,275 Supplies: $26,579 Telephone: $13,685 Postage & shipping: $34,769 Occupancy: $8,435 Equipment rental and maintenance: $27,122 Printing and publications: $8,522 Travel: $13,101 Conferences, conventions and meetings: $46,784 Depreciation, depletion, etc: $35,207 Awards Program: $2,135 Bank charges: $5,705 (This seems very high, but may include credit card processing fees) Birthday Ball expense: $32,536 Commandant's Contingency (?): $3,954 Comp Tecg Supp/Pro (?): $1,880 Condo Fees (???): $13,442 Contributions: $1,997 Dist of Card & Notepad Program: $18,771 Dist of Holiday Label Program: $58,778 Distribution of Life Mem Int (?): $257,248 Insurance: $82,608 Internet: $10,220 Iron Mike & Dickie Chappelle awards: $5,066 Janitorial Expense: $5,400 Loss on Ppty Disposal: $105 Marine of the Year: $150 (That's all?) Membership Promotion: $55,537 ("promotion" labeled program expense) Miscellaneous: $1,407 MOY & PNC Prog Expenses: $1,692 National Billing (?): $10,912 (labeled program expense, sounds like either management & general or fundraising to us) Officer & Committee Allowances: $93,041 (nice allowance!) Outside Payroll Svc: $6,380 Production of MCL News Magazine: $661,382 Veterans Day National: $35,566 Vice-President Visit: $14,364 (allocated to program services) Total functional expenses: $2,311,466 These were allocated as $1,312,223 (49%) in program services, and $999,243 (38%) in management and general expenses, with $0 allocated to fundraising. Expenses do not add up to 100% because they ended the year with an excess of $345,914 (13%). Part III of the Form 990 is a Statement of Program Service Accomplishments. We are providing that information for you here. This is more detail regarding the expenses allocated as program service expenses: Contributions to Marine Corps League Foundation for scholarship and the Young Marines of the MCL for programs: $20,000 Conferences, conventions and meetings: the League support and organizes two meetings throughout the year as a way to assemble the League's members: $46,784 Production of Marine Corps League News Magazine, which is distributed quarterly to subscribers: $716,446 Sale of Marine Corps League merchandise, offering an extensive selection of Marine Corps apparel and accessories: $229,025 Award Programs, Promotions and Travel Allowances: The League engages in activities to gain financial support (sounds like fundraising) through the sale of cards, labels and notepads to promote membership (is this fundraising, since membership generates dues?) and to pay officer and committees to travel to meetings: $250,036 Veterans Day national exposure expenses (sounds like promotion) for the League and to support various Veterans Day activities: $35,566 Expenses to support Vice-Presidential visit (we'd like to know what those were and how they qualified as program services): $14,364 So there are the raw numbers. What do they mean? Well, for starters, let's give the Marine Corps League kudos for not funneling large portions of their income to for-profit fundraisers. They generate funds through contributions from the general public, membership dues ($30/year or varying amounts for life membership, depending on age), sale of the Marine Corps League magazine Semper Fi, special events, and sale of Marine Corps league merchandise. If we were advising MCL, one of the first things we'd want to take a hard look at is their magazine, Semper Fi. There's really not enough information about it on the Form 990, and it's hard to quantify because the annual membership dues of $30 includes a "free" subscription to the magazine, so we don't know how much of the membership dues revenue can be attributed to the magazine. It is responsible for $716,448 in expenses, and total membership dues were just $905,448. So we would think efficiency could be drastically improved and expenses reduced by switching to online publication of the magazine. However, we also realize that there may be a number of older members without computer access, and having the magazine online only would deprive them of access to the magazine. Perhaps a survey or study could be conducted to determine how many would be satisfied to review the magazine online and the production run of printed copies could be substantially reduced, thereby reducing that massive expense (at least theoretically -- we don't know if there are minimum printing requirements in the printing contract). There is also a line item for $375,220 in revenue generated by "MCL News," yet it also reflects $-15,499 in "net realized loss - exp on financial statement." We can't be sure, but we think they are using "MCL News" and "Semper Fi" magazine interchangeably to refer to one publication. There is an advertising rate sheet online for the magazine, but there is no advertising revenue reported. Is that what the $375,220 represents? Possibly. We can't tell if that amount represents advertising sold for the magazine, or single sales of the magazine (if there are any) in addition to subscriptions. There are a couple of items on the Form 990 that raise our curiosity. There is a revenue line item called "Insurance Admin Fees," responsible for $16,146 in revenue. We have no idea what that income represents. The other line item we'd like more information about is the "condo fees" expense of $13,442. That's $1,120.17 a month in "condo fees." What is the condo used for? Is their national headquarters office a condo? We don't know, but it could be, because there's no amount listed for rent, and the $8,435 ($702.92/mo.) in "occupancy" expenses could easily be utilities (electric, gas & water) and other upkeep expenses. This theory seems to be supported by the depreciation schedule, which lists buildings, including "office space" of $287,567, and Land "Units 4A, 5 & 6" plus Land "Zone 7" of $137,237. So that may be a legitimate expense, but calling it "condo fees" without specifying that's it's an office condo (if that's the case) raises eyebrows. Bottom line: On the one hand, we'd like to see the Marine Corps League become more efficient and reduce those expenses for its print magazine, and we'd like a little more information on some of its other activities. We'd like to see it contribute more to the Marine Corps League Foundation for scholarships, and we'd like to see a larger percentage of revenues dedicated to true program services (not marketing or promotion). On the other hand, we have to congratulate the Marine Corps League for raising that level of revenues without resorting to professional, for-profit fundraisers. Whether their expense allocation meets your personal giving guidelines is a decision only you can make.
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