Does AARP make a profit?

Editorial team Published on

AARP is a nonprofit social welfare organization, not a for-profit company.

Organization Structure and Tax Status

  • Tax Status: AARP is recognized by the IRS as a 501(c)(4) tax-exempt organization.
  • Profits: Because it is a nonprofit, it does not distribute profits to shareholders. Instead, it reinvests its revenue back into its mission, advocacy, and educational programs.
  • Affiliates: It operates related entities like the AARP Foundation, which is a 501(c)(3) charitable affiliate, and a for-profit taxable subsidiary called AARP Services Inc. that manages commercial endorsements and licensing.

How AARP Generates Revenue

  • Royalties: The majority of AARP's revenue comes from royalty payments. These royalties are earned by licensing its name and logo to third-party for-profit companies that sell insurance policies, financial products, and travel discounts to members.
  • Membership Dues: Members pay annual fees, though dues make up a smaller percentage of overall revenue compared to commercial royalties.
  • Advertising and Sponsorships: AARP generates income from ads in its digital publications and magazines like AARP The Magazine and AARP Bulletin.

You can read more about their governance and background directly on the AARP About Page.

How much does the CEO of AARP make per year?

The CEO position at AARP pays approximately $2.4 million to $2.9 million annually in total compensation, depending on the fiscal year.

Because AARP operates as a non-profit organization, its tax filings disclose exact historical executive earnings:

  • Former CEO Jo Ann Jenkins (who led the organization until late 2024) received a reportable base compensation of $2,746,855 in her final full year, with total annual packages regularly fluctuating between $2.3 million and $2.9 million over her last few years.
  • Current CEO Dr. Myechia Minter-Jordan (who took over the role in November 2024) was reported to have a starting prorated compensation of $400,117 for the final weeks of that transition year. Her full-year annualized compensation is structured to mirror this multi-million dollar executive pay tier.

Full financial breakdowns and yearly salary filings are publicly tracking via the ProPublica Nonprofit Explorer and the Philanthropy 990 Scout.

Why are some people against AARP?

Criticism of AARP typically centers on its massive commercial revenue from insurance partnerships, its powerful lobbying footprint, and perceived political biases.

Financial Conflicts of Interest

  • Insurance Royalties: Critics, including various market watchdogs and media reports, note that a large portion of AARP’s revenue comes from royalties and licensing fees (often referred to as kickbacks by detractors) paid by private companies—most notably UnitedHealthcare—for endorsement of supplemental insurance and financial products.
  • Commercial Focus: Some advocacy groups argue that AARP functions more like a massive marketing and sales enterprise for commercial products than a pure public-interest non-profit for seniors.
  • Junk Mail and Marketing: Members frequently complain about receiving a high volume of targeted marketing communications and solicitations for insurance and financial services after joining.

Political Lobbying and Stances

  • Entitlement Programs: Conservative critics and free-market groups contend that AARP lobbies against necessary structural reforms or spending reductions for entitlement programs like Social Security and Medicare, which some economists argue threatens the long-term solvency of those programs.
  • Partisan Perceptions: Opinions on AARP's political advocacy vary widely among the public. While some conservative critics view the organization as aligned with liberal or big-government policies, certain progressive or Democratic lawmakers have also criticized AARP at times for supporting specific healthcare or Medicare legislation that they believed compromised consumer interests. Conversely, the organization maintains that it is non-partisan and does not endorse political candidates.

Where does AARP get most of its money?

AARP gets most of its money from corporate royalties paid by companies to license the AARP name and logo on products like health and life insurance.

Main Revenue Sources

  • Royalties (Over 60% to 80% depending on the year): The largest share of income comes from business partnerships. The most lucrative agreement is with UnitedHealthcare for selling AARP-branded Medigap and Medicare Advantage insurance policies.
  • Membership Dues (About 15% to 20%): Fees collected from millions of individual members aged 50 and older make up a distant second place compared to corporate licensing.
  • Other Sources: Additional funding comes from investment income, publication advertising in AARP The Magazine and the AARP Bulletin, and smaller program fees.

Is AARP membership declining?

No, overall AARP membership is not declining; it remains stable at roughly 37 to 38 million members.

Current Status and Trends

  • Stable Numbers: AARP consistently reports around 38 million members, making it one of the largest membership and advocacy groups in the United States.
  • New Demographics: The organization has seen a recent uptick in younger adults (including Millennials and Gen Z) joining to take advantage of low-cost discounts on travel, dining, and retail amidst high inflation. Anyone 18 and older can join, not just retirees or those over 50.
  • Revenue Shifts: While membership dues stay low ($16 to $20 annually), the vast majority of AARP's financial revenue comes from corporate royalties—specifically partnerships on branded insurance products—rather than direct membership fees.

Controversies and Backlash

  • Public Scrutiny: AARP occasionally faces coordinated backlash or calls for boycotts over specific legislative stances or its lucrative financial arrangements with major healthcare and insurance providers like UnitedHealthcare.
  • Alternative Groups: During periods of political or healthcare policy debates, some members leave to join conservative alternatives like the American Seniors Association (ASA). However, these periodic waves of cancellations have not resulted in an overall contraction of AARP's massive base.

Know These Things BEFORE Joining AARP!

9 related questions found

What charity has the highest paid CEO?

Large non-profit healthcare systems, large health-related organizations, and major sports or cultural foundations often report the highest-paid executives in the non-profit sector, with annual compensation packages regularly exceeding $10 million.

Highest-Paid Non-Profit / Charity Executives

When looking broadly at 501(c)(3) and major non-profit organizations (including large hospital networks and health plans):

  • PGA Tour Inc.: Jay Monahan led with a total compensation of approximately $14.9 million.
  • Kaiser Foundation Health Plan: Gregory Adams received roughly $13.8 million.
  • Providence St. Joseph Health: Rod F. Hochman earned about $11.2 million.
  • Sentara Health: Howard P. Kern earned around $10.1 million.

Traditional Charities and Research Institutions

When excluding large insurance-style healthcare systems and focusing on traditional public charities, research centers, and foundations:

  • Memorial Sloan Kettering Cancer Center: Former CEO Dr. Craig B. Thompson recorded compensation packages near $8.1 million (largely driven by deferred compensation and retirement payouts), while current leaders like Selwyn Vickers have reported packages near $5.8 million to $6.9 million.
  • City of Hope: Robert W. Stone earned roughly $4.5 million to $5.4 million.
  • American Heart Association: Nancy Brown earned roughly $4.1 million to $4.5 million in total compensation, heavily weighted by performance incentives.

You can review a detailed breakdown of thresholds and evaluations at CharityWatch or examine broader sector data via Economic Research Institute.

Is AARP a good charity to donate to?

AARP’s philanthropic arm, the AARP Foundation, is a highly rated and accountable charity that focuses on helping low-income older adults.

Charity Ratings and Accountability

  • Top Ratings: The AARP Foundation holds a 4-star rating from Charity Navigator.
  • BBB Accredited: It meets all 20 of the Better Business Bureau (BBB) Wise Giving Alliance Standards for Charity Accountability.
  • Program Spending: Approximately 78 to 81 cents of every dollar spent goes directly toward programs and services rather than overhead or administrative costs.

What the Foundation Does

  • Core Mission: It works to reduce poverty for adults aged 50 and older by addressing issues like hunger, housing, income inequality, and isolation.
  • Key Programs: It runs programs such as free tax preparation (Tax-Aide), local food assistance, legal advocacy, and job training programs (like SCSEP).

Distinction from the Main AARP Organization

  • Structure: The main AARP organization is a 501(c)(4) advocacy and lobbying organization, meaning direct donations to general AARP advocacy are typically not tax-deductible.
  • The Charity: Donations made specifically to the AARP Foundation are tax-deductible 501(c)(3) charitable contributions.

What is the downside of joining AARP?

The main downside of joining AARP is the large volume of promotional and insurance mail they send, which many members find annoying or overwhelming.

Drawbacks of AARP Membership

  • Junk Mail and Solicitation: AARP is notorious for filling mailboxes with constant offers for insurance, renewals, and partner products.
  • Overlapping Discounts: Many of the standard hotel, restaurant, or retail discounts offered by AARP are available to anyone simply by asking for a general senior discount without a membership.
  • Political Contention: Opinions on Facebook are mixed regarding AARP's political lobbying and public stances, with some conservative members opting instead for alternatives like the Association of Mature American Citizens (AMAC).
  • Under-50 Limitations: While adults under 50 can join as associate members, they cannot access age-restricted financial services and specific insurance products.
  • Wasted Cost if Unused: The standard fee is about $20 a year, but it is a waste of money if you do not regularly travel, rent cars, or use their specific partner insurance plans.

What is the Republican equivalent of AARP?

The primary conservative and Republican-leaning equivalent to the AARP is the Association of Mature American Citizens (AMAC).

Overview of AMAC

  • Founded: 2007 by Daniel C. Weber.
  • Membership: Over 2 million members aged 50 and older.
  • Purpose: Positioned explicitly as a right-of-center, conservative alternative to the AARP, focusing on traditional values, lower taxes, and secure borders.

Services and Benefits

  • Member Discounts: Offers savings on travel, hotels, rental cars, and restaurants similar to traditional senior programs.
  • Insurance Products: Provides access to Medicare supplement insurance, dental, vision, and life insurance guidance.
  • Publications: Sends members the quarterly AMAC Magazine featuring conservative news and commentary.

Political Advocacy

  • AMAC Action: The organization’s advocacy branch represents member interests in Washington, D.C., pushing for conservative policies such as the reduction of government regulations, protection of the Second Amendment, and reforms to secure Social Security.

Other Conservative Alternatives

Opinions on Quora are mixed regarding the efficacy of these groups compared to mainstream providers, but other smaller conservative or right-leaning groups position themselves similarly in this space, including the American Seniors Association and the 60 Plus Association.

Is there anything better than AARP?

Whether an alternative is "better" than AARP depends on your political views, your need for specific benefits like roadside assistance or bulk shopping, and whether you want a broad lifestyle organization or a targeted tool.

Conservative Alternatives

  • AMAC (Association of Mature American Citizens): This is the most popular conservative alternative to AARP. It costs about $16 per year (with a spouse included free) and focuses on conservative advocacy, Medicare guidance, and similar lifestyle discounts. Unlike AARP’s exclusive partnership with UnitedHealthcare, AMAC offers Medicare advisory services partnering with multiple carriers.
  • Other Conservative Groups: Organizations like the 60 Plus Association or American Seniors Association offer alternative political lobbying and senior benefits for those who disagree with AARP's public policy stances.

Practical and Everyday Alternatives

  • AAA: If you care mostly about travel perks and roadside assistance, many seniors find AAA offers far superior and more reliable practical daily value than AARP.
  • Warehouse Clubs: Memberships like Costco or Sam's Club provide bulk savings on groceries, gas, and household items that often add up to more cash-in-pocket savings than an AARP card.
  • Free Discount Apps: Tools like GoodRx for prescriptions or cash-back extensions offer everyday savings with zero annual membership fees.