The foregoing financial data stand alone as ?facts? as asserted by NHRA to the IRS. However, some analysis leads to some interesting conclusions. One is that (assuming 2005 is a typical year) NHRA spends about as much as it takes in during the year -- $100m or so. They pay out prize money that represents about 20% of their annual revenue. If one can conclude that the remainder of their expenses is reasonable or justifiable, the implication is that they are paying out the limit of what they can afford without increasing their revenues somehow. The compensation of their six officers/directors totals $2m which, while a lot of money, represents only 2% of their annual expenses. The expense listing also does not reveal any overt diversion of expenses to ?perks?. (You can view the full 501c report for the gory expense details if you need to be convinced.)
On the face of it, it would appear that the NHRA does a pretty fair job of efficiently directing revenues toward meeting its non-profit objectives, which are stated in the 501c filing as ?.?to educate the general public in automotive safety???.. to establish rules that govern competition ???. To help perpetuate the sport and maintain good organization ????.
Regarding the ?worth? of the organization, that would be the net asset value of $30m plus whatever goodwill NHRA can negotiate from a buyer. Whatever proceeds come from selling any part of the organization (such as the rights to the Powerade series and the aura of ?NHRA?, for example) would accrue to the organization, to be used as the directors see fit to further the mission of the organization. Typically, in an organization that started out as NHRA did, the control of the board of directors remains with the board of directors. That is, any addition to or replacement of board members is decided by the board itself, not the members at large. Perhaps someone else can comment on the authority held by the NHRA board if they have knowledge. If the board is self-perpetuating, then the members have only two choices if they don?t like the direction taken by the board: continue as members, or walk away. In this sense, even though racers have contributed to the success of NHRA for decades, they have no direct stake in the value of the organization and no direct say in how it is run.
As revealing as the financial information is about how NHRA conducts its business, it is a snapshot of the past, not the future. At that, it is unclear how either the revenues or expenses might be attributed to either the pro racers or the sportsmen. It is also unclear how things might change in future when pro revenues go away, but so does their prize money and the operating costs of Powerade series races. My guess is that even NHRA doesn?t have a perfectly clear picture of what ?non-profit NHRA? will look like when the dust settles. However, there seems to be good potential for them to return to their roots and reinterpret their objectives ( ????.. perpetuate the sport ??.?) in favor of class racers and others at the amateur level. I think it would be shortsighted to make the assumption at this point that NHRA intends anything else (and, in particular, that it intends only to enrich a small number of individuals.) I also think this is a poor time to be demanding to be accommodated, rather than asking NHRA how racers can work with the organization to build a future that will indeed ?perpetuate the sport?.
Food for thought.
|