Day 3 of NRA Board committee meetings September 2022

Pleasantly surprised by greater access today

Day 3 started with the Finance Committee chaired by David Coy. Management in attendance included LaPierre, Ouimet, Rowley, and DeBergalis. There were more directors in attendance that I captured. I saw Cotton, Lee, Ellis, Hiltunen, Hammond, Cors, King, Journey, Rumple, Nyce, Freidman, Chapman, Swartz, Schmeitz, Jenkins, Miller, and Wade.

I was surprised that after calling the roll and adopting the agenda, Chair Coy did not go into executive session and began his remarks. What follows is my synopsis of those remarks without any editorial comments. 2022 is a watershed moment and the work over the past four years brought us here. Business Processes and procedures have been reviewed and upgraded. Seventy vendor contracts were reviewed and revised or terminated. These renegotiated contracts have a positive impact on our cash flow. A culture of compliance is enshrined. The Board has a better understanding of the diverse activities of the NRA. The resourcefulness of the workforce in light of the hostile environment and the blizzard of attacks from the government and media that started with the 2016 election is an achievement. The anti-NRA forces had a significant defeat when the NY Attorney General’s move to dissolve the NRA was removed. The Bruen decision is an epic achievement reinforcing our rights. The NRA is still involved in 24 additional cases at the federal and state levels fighting for our rights. The NRA has negotiated this adversity but at a cost. There were significant expense reductions, but we are now seeing the benefits. There was a one-time cost to settle a legal matter earlier in the year, which is behind us (AcMac settlement?). All of the insurance policies were renewed and at comparable costs to last year. He closed by saying that they made difficult choices and accepted responsibility. He said that “this is the #1 Mark 2 version of the NRA is deployed to execute the mission of the NRA.”

The Investment Oversight subcommittee report was next given by the fund representative. What follows is my synopsis of those remarks without any editorial comments. This is the most challenging market in the pat 50 years. Bonds are down over 13%. The FED has increased interest rates 3 times. PE ratios are down to 18% even though earnings are steady at high single digits. They expect corporate earnings to start writedowns, as an example, FEDX’s earnings guidance announcement and their mention of a global recession yesterday led to a 24% reduction in their price. At some point in the next 12 months, there will be an opportunity to rebalance more into equities. In the 12 months post midterm elections since 1950, the S&P has never been negative. in 10 of the 12 times the markt has dropped 20%, the market was up 24% in the following 12 months, the big exception was 73-74. Year to Date the NRA portfolio is doen 16.12%. The benchmark is a drop of only 13.95% so the portfilio is undrperforming 2.18%. They reviewed the growth managers and decided to stay with them. the portfolio is 62% stocks, 37% of which are US companies and 25% international, 25% is fixed and cash. 18% alternatives and real estate. Commodities are the only bright spot in the portfolio. In response to questions from the board, there is less than 1% of the portfolio in Russian stocks (Gazprom). The portfolio managers cam do short sales. They do not do option trading. The Pimco commodity fund that was added 15 months ago is up 22%. PE ratios are at 17, when they drop to between 14 and 16, the fund will rebalance by buying back into stocks. While there some pockets of good news, FED chaiman powell remains consistent with his rate increases, there are recession indicators but the recession is expected to be mild through 2023.

With the Treasurers report up next, the meeting went into executive session, and I had to depart.

The last meeting of the day was the Public Affairs Committee, chaired by Scott Bach. Staff attending were LaPierre, Ouimet, Debergalis, Hamlin, and Schrock. Directors attending were Rumple, hiltunen, Barr, Colandro, Vaughn, Nyce, White, Wright, Walker, Heil, Lanford, Journey, Robinson, Hernandez, Demarest, Ellis, Fleeman, Coy, and Lee.

LaPierre gave his report first. He said that there is no longer an exclusive agreement with MMP and that they are working with other media and marketing companies and that they will be more aggresive on social media with a focus on growing membership and donations. A focus on growing membership is a welcome change. LaPierre acknowledged that they were lagging in the social media area. He had staff preview some new media that will launch this week. The video pointed out the media suppressing using firearms for self defense and gave an example of 5 top media outlets only citing 10 self defense stories while they were citing 1,743 stories referencing murder, guns, or shootings. Anothe angle will be the impact of the “no cash bail” efforts that are keeping violent criminals on the street. This generated a discussion on shadow banning and suppressing of stories. NRA staff said that they have good relationships with Google and Facebook predomoinantly due to NRA spending, but that since Twitter has banned political ads, they don’t do much with them.

Ouimet gave a report and highlighted 3 senatorial video campaign ads that are running in GA, PA and NM focusing on gun right records. These videos are designed with a mobile first approach.

Debergalis reviewed general operations. He also talked about leveraging operations to grow membership. He noted that the roof leaks are fixed. He reviewed teh SchoolShield program with 100 grant applications and $2.2million awarded in grants and 300 school security assessors trained across 30 states. The school security assessments are free to the schools.

Hamlin reviewed the publication stats.

• 3,376,159 print subscribers

• 282,768 digital subscribers

• 1,902,746 web

• 6,631,794 newsletter - these have a 33% open rate

• 750,000 TV

He noted that web traffic is down about 30% from the high during COVID, but that engagement is higher with more articles read and greater advertising revenue generated. Hamlin also announced a new program with state suecific QR codes on the magazine covers. The QR codes take the reader to the states voter guide.

Schrock announced a $250,000 grant from the NRA Foundation to USA Shooting. As part of this grant, the US Olympic athletes will have the NRA foundation logo on their team uniform gear.

I’ll be back with an update from the board meeting tomorrow.