financialresults
Additional Copies Contact MOAA’s Member Service Center at msc@
moaa.org or (800) 234- MOAA (6622) to have a copy of MOAA’s audited financial statements for 2014 mailed to you.
2014 was a financially challenging year for our association. After two years of adding over $11 million to the bottom line, MOAA’s financial position, while still very strong, decreased by over $7 million. We are not pleased with the final numbers, but we think we are on the right path to maintain the long-term financial strength necessary to provide outstanding support to our mem- bers and the military community at large. MOAA continues to focus on develop- ing new sources of revenue to improve our financial position and alleviate our reliance on dues and investment returns. Unfortu- nately, most of our nondues revenue sourc- es (e.g., advertising and royalties programs) remain challenging. Based on a comprehen- sive study using updated DoD actuarial ta- bles, we also increased our liability for Life membership to reflect the longer expected lives of MOAA members and their surviving spouses. While CFOs usually aren’t known for their humor, I’d like to suggest perhaps there is a correlation between becoming a MOAA Life member and living a longer life! In all seriousness, we remain very commit- ted to ensure we reserve the funds required to support all Life membership benefits as we sincerely believe Life members are the backbone of our association. Life member- ship is good for the association as it reduces recruiting and retention costs, and it is also an exceptional value for our members. MOAA has four primary revenue
sources: dues, investments, advertising, and royalties from sponsored products and ser- vices. We are growing MOAA’s new Military Family Initiative to help support and ex- pand many of the high-impact programs we provide for the greater military community. On the expense side, MOAA spent just
over $22 million on behalf of its members (excluding the $2 million Life member ad- justment). Expenses can be categorized into four major areas: legislative affairs (MOAA’s
70 MILITARY OFFICER JUNE 2015
original purpose and still its primary mis- sion) is 11 percent of the operating expense budget; informing members through Mili- tary Officer and MOAA’s Web Base accounts for 31 percent; supporting our councils and chapters is another 9 percent; and the bal- ance helps us provide essential benefits and information, as well as MOAA-sponsored products and services. Expenses are the one area we have the most control over, and it is relevant to note our expenses, adjusted for inflation, are $3 million below 2008 levels. In 2014, the MOAA Scholarship Fund
provided $9.2 million of financial assistance through interest-free loans and grants to 1,723 children of military families for under- graduate education. Since its inception in 1948, the fund has helped more than 13,000 military children. The fund, not included in the financial statements below, exceeded $95 million at the end of 2014. This is made possible by the generosity of our members. Our Statement of Financial Position
reflects that MOAA’s assets are primarily investments, and liabilities primarily are owed to members. MOAA has collected $64 million in both annual and Life membership dues that will be earned as income over the next 60 years. The Widow’s Trust is a $1.4 million obligation to ensure beneficiaries of an expired MEDIPLUS® plan receive the health care insurance they were promised. With net assets of nearly $54 million as of Dec. 31, 2014, MOAA remains in a solid financial position to continue serving Amer- ica’s military officers and their families. The support of our 380,000-plus members allows us to remain financially secure and continue our mission to never stop serving.
— Col. James W. O’Brien, USAF (Ret) Chief Financial Officer
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