NAR Should Clarify RPPI Distribution Scheme

So, who's figured out how to distribute all this money?

In the aftermath of the vote on REALTOR Party Political Survival Initiative (RPPI), NAR has released a document showing where the funds will be going (PDF). I’m not entirely sure what some of the terms mean. For example, what does “Campaign Services” cover? What is the difference between “Issue Mobilization Program” and “Issue Coordinated Campaigns”? I figure I could probably learn more about it in the next few weeks.

But the real question arises in the footnotes. (Don’t they usually?)

Footnote 2 says this:

The program dollar amounts (rounded) in the 2012-2016 budget years are based upon the proposed RPPSI budgets & a constant of 1,050,000 members, except for the state/local candidates IE Program, explained in Note #4. The state/local IE Candidates Program is the only program that has a “per member” allocation as a formally stated component of its operation. Direct funding or use of services in all other programs is approved based upon submitted applications that outline the issue and need. Additional programs for education and new pilot initiatives that are approved as the RPPSI evolves will result in adjustments to the annual per member allocation amounts.

Footnote 4, referenced above, says this:

This is in response to AE & Member feedback requesting an updated distribution of State & Local Independent Expenditure Campaign resources over the five (5) year period and does not reflect the Executive Committee’s recommendation prepared subsequent to the Finance Committee’s 2012-2013 budget proposal.

The chart following, in footnote 4, shows that of the $6.31 per member allocated to “State & Local Candidates IE Program” breaks down as $4.73 for Annualized State Allocation (Per Member) and $1.58 for Annualized NAR Reserve Pool (Per Member).

People say I’m a pretty smart guy, but man… I’m confused.

The Independent Expenditure Program

First of all, based on this document… will NAR engage in Federal independent expenditure campaigns or not?  I don’t see a line-item for Federal Candidate IE Program. I do see one for Federal Candidates; should I assume this is the same as Federal IE? The amounts budgeted would imply that this is the Federal IE program:

Federal Candidates:

  • 2012 – $0.34 – Presidential Election Year
  • 2013 – $0.00
  • 2014 – $6.08 – Midterm Election Year
  • 2015 – $0.00
  • 2016 – $10.69 – Presidential Election Year

As you can see, 2013 and 2015 are non-election years so it makes sense that there wouldn’t be any money allocated that way. But I am puzzled by only $0.34 per member (measly $340K assuming a million members) for the 2012 Presidential Election Year, which is also shaping up to be a major struggle between Democrats and Republicans for control of the Senate. $340K buys you zilch in a campaign where President Obama is looking to raise a billion dollars, and the unions are likely to pour everything they have into various races in the aftermath of Wisconsin, Ohio, and other defeats around the country.

I can only conclude that NAR must be writing of 2012 as too late to have an impact on, and is focusing on the 2014 and 2016 cycles.

Or, do the races for Congress and Senate count as State & Local Candidate IE, in which case we’re looking at an additional $4.78 million in independent expenditures, but done at the state and local levels?

It’s unclear.

Who Administers the IE Programs?

That lack of clarity leads to another question. Who actually designs, runs, and administers the State & Local IE programs — particularly if races for Congress and Senate fall under State & Local, instead of under Federal?

For example, who will actually come up with the TV ad for Congressman Joe Blow running for the 8th district in Random State? Will it be some agency retained by NAR, paid for by NAR, who works with the State (or Local?) Association to craft the message? Or will the State Association retain its own political advertising firm, paid for by the $4.78 per member?

Who will do things like media purchasing?

The issue here, IMHO, is purchasing power. For example, the Rhode Island Association of REALTORS (RIAR) has 4,000 members. On NAR’s pro forma, RIAR would have $19,120 to spend on State & Local IE. That might buy you… what… a couple of late night cable spots in the Rhode Island market, which is really part of the Boston media market? If NAR is negotiating a media buy, however, with national companies — whether ClearChannel, or CNN, or the alphabet networks, or Cablevision or what-have-you — then there would be greater purchasing power.

But if NAR is doing all the buying, the media planning, and the creative work with its vendors/firms… the per-member allocation is… what exactly? Does NAR need to get approval from RIAR on the campaign that its agency came up with for some Rhode Island congressman?

It’s all very unclear.

Speaking of Money…

Footnote 2 above in particular raises a question. It seems to suggest that of the $40 per member collected in RPPI dues, only $6.31 for State & Local IE Program is “allocated” on a per member basis. (And of that $6.31, $1.58 is for a “NAR Reserve Pool”… does the State/Local Association have the right to spend that money?) The remaining $33 and change are subject to approval based on “submitted applications that outline the issue and need”.

A few questions come to mind.

First, who does the approving? Is it the full NAR Board? The NAR Executive Committee? NAR Staff? RPAC Directors? Do the State and Local Associations have a say in the decision, or are they mere applicants?

Second, the strong implication of the “approval” clause is that allocation of that money is not on a per-member basis. In other words, smaller states could get far more than “their share” on a pro-rata basis, based on “issue and need”. So in theory at least, 4,000 strong RIAR could get $5 million from RPPI funds, while the 155,000 strong California Association of REALTORS could end up getting $5,000.

In fact, that matches up with what I had heard during the Midyear Meetings from a major player in his State Association, who is also a NAR Director, and a RPAC Director: that RPPI funds would be distributed upon application and approval, rather than on a pro-rata basis.

If that is true, then NAR’s claim that 2/3 of the RPPI funds would be going back to the State and Local Associations is technically true, but unlikely to satisfy the larger Associations who suddenly find that they’re only getting some $7-8 per member out of the $40 per member. That strikes me as a bit too much of the “From each according to ability, to each according to need” philosophy of Karl Marx for most REALTORS to accept.

Third, note that the $7-8 per member assumes that the State & Local IE Program funds are indeed distributed on a pro-rata basis, and to the State & Local Associations directly, rather than managed and administered by NAR nationally. As I mention above, that is not exactly crystal.

It’s all very unclear.

Questions That Need Answering

So, based on the above, here are the questions that need to be answered/clarified:

  1. Exactly how much of the $40 goes back to the State & Local Associations on a guaranteed, no-approval-required basis?
  2. Who will decide which applications will be approved, and to what amount?
  3. Who will administer the independent expenditure program, and how?
  4. Assuming that the above speculations are correct, will the Big Associations be okay with funding the political activity of Small Associations? Or are in for another round of fights in the near future?

Your thoughts, questions, comments, and criticisms welcome.



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Rob Hahn

Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.

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1 thought on “NAR Should Clarify RPPI Distribution Scheme”

  1. Good thing you’re not a member, Rob. Intelligent financial questions would quickly make you persona nongrata at your local Association.

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