A Stitch in Haste

Think the AARP is just a non-partisan, non-biased, non-profit advocacy group for the elderly?

Think again:

The nonprofit group has an operating budget of nearly $800 million, without parallel in Washington. AARP also makes millions from royalties, investments and sales of insurance policies and prescription drugs.

"We are not like a corporation. We bring in money in a kind of social enterprise and that money goes into the good work that we do," AARP CEO Bill Novelli told FOX News.

AARP also publishes the largest circulation magazine in the country, from which it earns $77 million in advertising. It also earns $300 million each year in royalties from the use of its name on dozens of consumer products and insurance policies.
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AARP collects more than $200 million in dues every year from its 35 million members.
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The organization manages an investment portfolio of $912 million. In 2003, it invested $737 million of its portfolio in stocks and mutual funds, earning returns of $60 million.
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AARP also collects premiums from members who buy AARP-approved insurance. Before turning the money over to the insurance companies, however, AARP invests it in short-term securities. In 2003, this maneuver raked in $24 million.

It's one thing to arrange member discounts for things like airfares or car rentals, or to sell an endorsement (e.g., "The Official Airline of the American Bar Association"). But the AARP is far more of a Leviathan than that -- it engages in brazen for-profit business under the guise of "non-profit status." They sell insurance policies. They sell prescription drugs. They sell a magazine.

And then they have the hubris to claim they're "not like a corporation"?

Feh.

A for-profit corporation has "customers." A lawyer has "clients." A doctor has "patients." A magazine has "subscribers." The AARP has "members."

Do the semantics really make any difference?

And -- like for-profit corporations, lawyers, doctors and magazines -- the AARP can only endure by keeping their current customers clients patients subscribers members and acquiring new ones. In the AARP's case, they choose to do so by peddling lies and fear.

And in so doing they claim the moral high ground?

Feh.

Other exposés of the AARP here and here. Meanwhile, the official list of the AARP's various tentacles can be found here.

UPDATE: Here's an anti-AARP website.

Related Posts:
Social Security: Return of the Flying Pigs
Social Security Reform 101

Tennessee is considering revoking the tax-exempt status of the YMCA:

The YMCA has been involved in a nine-year battle with a group of private health clubs who say the YMCA's state tax exemption gives the organization an unfair advantage in competing for members.

Of course, the most insolent abuser of tax-exempt status is the AARP, which sells -- just about everything. And as a tax-exempt behemoth, its inappropriate competition with taxpaying businesses has a significant impact throughout the private sector.

Let's say I decide to retire and open a gay bar in my neighborhood. Not to make money, but to expand the gay presence in my locale, or to "give back to the community," or whatever. I make a conscious choice to operate my bar for zero profit. I overpay my bartenders and undercharge my customers -- all carefully calculated to just break even.

If that happens -- if I have no profit -- then I will pay no tax. I am, essentially, a tax-exempt institution. Which is fine if that's what I choose to do. But would anyone seriously entertain the notion that I should be granted, upfront, tax-exempt status? Of course not. My bar is not a charitable, educational, cultural or otherwise "civic" institution. It's a business, albeit one that I choose to operate in an unconventional manner.

How is the YMCA, or the AARP, any different? If the YMCA wants to run a gym, or if the AARP wants to offer dirt-cheap life insurance or run any other business for the benefit of seniors rather than for themselves, then they can go right ahead -- but without a discriminatory tax advantage. Just like me and my breakeven gay bar.

It's quite simple really: tax-exempt is (or should be) as tax-exempt does. It should be the activity, not the bottom line, that determines tax-exempt status. Run a health club? That's a business, not a charity -- pay the tax.

Sell life insurance? That's a business, not a charity -- pay the tax. Sell mutual funds? That's a business, not a charity -- pay the tax.

And so on.

If the YMCA wants to make gyms available to the poor and disadvantaged, then let them create a charitable endowment to fund gym vouchers for low-income families. But don't undercut, via discriminatory tax policy, honest entrepreneurs trying to make an honest profit by providing an honest service -- and paying taxes in the process.

Perhaps there will be some gray areas -- why is a museum tax-exempt but an art gallery not? But wherever that gray area might be, it is not at the gym.

Hat tip to Tax Policy Blog.