NRA Running on Empty at Indy Annual Meeting: Possible Bankruptcy?

The National Rifle Association has scheduled the Annual Meeting to be held at Indianapolis, Indiana (Home of the Indy 500) on April 14-16, 2023. The timing of the NRA meeting ironically corresponds to a financial tipping point when the NRA’s cash meter drops to empty. The annual meeting should be a highlight for all members as a celebration of the second amendment and of the NRA’s long history of supporting firearm programs. However, the greatest spectacle will be when the NRA’s financials are reviewed by the Board of Directors (BOD) with the possible anecdote “Indy We Have A Problem!” The NRA’s financials are more than just a problem; the actual numbers reflect how the ongoing corruption scandal has decimated the organization. In reviewing the current balance sheet through November 30, 2022 the pending disaster is easy to predict.

Hightlight Points

• Line of credit appears maxed out at $31.1M from $7.5M as of Dec-31-2021.
• Cash Position is $17.5M from $30.4M as of Dec-31-2021.
• Assets have dropped to $180M from $211M as of Dec-31-2021.
• Liabilities have increased to $152M from $134M as of Dec-31-2021.
• Net assets have dropped to $28M from $78M as of Dec-31-2021.

The balance sheet elements reveal the inconvenient truth of the current financial position through the increasing line of credit, decline in assets, rapid increase in liabilities and loss of net assets. The line of credit was established at $28M by a bank according to the NRA’s 990 financial filing; but somehow, the NRA has exceeded the line of credit to a total of $31M. Exceeding the line of credit is revealing because the operation can no longer support the expenses through normal operating income. The line of credit was fueling the operation, but that has come to an end. Typically, a bank will call a line of credit due (i.e. repayment) when an organization becomes insolvent.

Tipping Point

Insolvency is the last warning sign on the financial road which drives most organizations into bankruptcy. Using the NRA’s balance sheet metrics, an insolvency date can be roughly predicted. The NRA is depleting net assets at a rate of $4.5M each month (ref: November 2022 financials presented to the BOD-January 2023). 

• The NRA will be technically insolvent in 6 months - MAY ($28 million/4.5 million per month)

The real driver to bankruptcy is cash position instead of net assets; therefore, a more accurate estimate of insolvency is the moment cash runs out. The NRA lost operating income of ($36M) through November 2022 which is roughly $3.3M/month. This continuing profit loss through 2023 will drain the tank on remaining cash reserves.

• The NRA will deplete cash on hand in 5.3 months - April ($17.5 milion/3.3 million per month)

Running out of cash in 5.3 months just happens to coincide with April 10, 2023. Financial planning is never this precise; however, observing a financial wreck approaching and not attempting to avoid the disaster is unfathomable. The Board of Directors has been warned REPEATEDLY by former Directors, industry advocates, and industry reporters without taking the necessary action to avoid the coming calamity. I spoke to a few of the current NRA BOD members who attended the January-2023 meeting, and once again the BOD was not informed of the current financial crisis. With the Indy-23 meeting looming, the NRA is running on fumes and will not finish this race! 

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