The Reason Foundation

Nonprofit profile at a glance

EIN
953298239
IRS 990 coverage
2011–2024
Forms available
Form 990 2024, Form 990-T 2024
Location
Los Angeles, CA, USA
Phone
3107408579
Rating
85
Verdict
STRONG
Rating confidence
Moderate
Sector
Educational Services and Schools - Other

Official website

Reported finances

Revenue
$22,810,664
Expenses
$21,964,556
Assets
$29,097,754
Liabilities
$7,131,217

Source: IRS Form 990. Selected filing: tax year 2024. Amounts in USD.

Leadership & pay

33 people listed

Executive titles in this filing

  • DAVID NOTT (PRESIDENT, CEO)
  • ADRIAN T MOORE (VICE PRESIDENT POLICY)

Highest reported compensation

  • DAVID NOTT (PRESIDENT, CEO): $562,095 total reported compensation
  • ADRIAN T MOORE (VICE PRESIDENT POLICY): $264,083 total reported compensation
  • JONATHAN GRAFF (CHIEF FINANCIAL OFFICER): $260,001 total reported compensation

Source: IRS Form 990. Selected filing: tax year 2024. Names and roles reflect this filing, not necessarily current officeholders.

Overview

Mission

Reason foundation advances a free society by developing, applying, and promoting libertarian principles, including individual liberty, free markets, and the rule of law. We use journalism and public policy research to influence the frameworks and actions of policymakers, journalists, and opinion leaders.

What it reported doing in 2024

Reason works with motivated policymakers and other stakeholders to develop and implement market-based reforms that are a model for policymakers at all levels of government. Our pension integrity project educates policymakers and taxpayers on pension reform. We actively worked with policymakers in 17 states on best practices in designing sustainable public pension systems. We produced the pension solvency and performance report and the gold standard series, core products that are used to educate legislators and expand outreach. We testified 20 times at the state and local levels, send a monthly newsletter featuring national trends in pension reform, and produced more than 50 media commentaries. Reason's education team is a leading voice in promoting improved educational outcomes for all children via school choice. Our team actively engaged legislators and stakeholders in 23 states, designing open enrollment models that give families greater flexibility in choosing better schools. We testified 26 times at the state and local levels. Our data analyses are widely used as benchmarks in support of choice-centered school funding, and our fiscal analyses inform debates on accountability. Our transportation team collaborated with legislators in 8 states on interstate highway tolling, pilot projects for mileage based user fees, and managed lane concessions. We testified 20 times at the federal and state levels on transit programs, calling for modernized air traffic control, expanded private investment tools, and deregulation. Reason's drug policy team worked in 17 states and at the federal level to help policymakers understand the consequences of regulating legal cannabis, hemp, and psychedelics markets. We testified 13 times at the state level and provided research support to policymakers seeking to fix the challenges of legalization.

Operating model

Revenue model
Donor-supported. 90% of the money available for current operations came from contributions and gifts.
Distribution model
Direct operator. The filing allocates 100% of reported program-service expenses outside its grant, affiliate-payment, and member-benefit lines. This expense classification does not rule out separately announced grant awards.
  • Includes noncash contributions: Reported contributions include donated property or goods.

The verdict

STRONG - A large share of available resources goes toward mission work and the filed numbers largely add up. Fundraising costs are high for each dollar raised and expenses are high relative to revenue.

Rating breakdown

  • Financial Efficiency: 82
  • Transparency & Controls: 87
  • Accountability: 94
  • Sustainability: 44
  • Growth: 100

Detailed rating inputs

Financial Efficiency

  • Mission deployment rate: 85.7%; rating input score 86
  • Program expense ratio: 88%; rating input score 88
  • Fundraising efficiency: $10.98 raised per $1 spent on fundraising; rating input score 41; 41st percentile among comparable filings

Transparency & Controls

  • Consistency checks: 100%; rating input score 100; 62nd percentile among comparable filings
  • Pay-setting controls: 4 of 6 controls in place; rating input score 67
    • Compensation committee: Pass
    • Independent consultant: Missing
    • Other Form 990s reviewed: Pass
    • Written employment contract: Missing
    • Compensation survey or study: Pass
    • Board or committee approval: Pass
  • Foreign activity oversight: Limited
  • Grant itemization coverage: 100%; rating input score 100; 72nd percentile among comparable filings
  • Major donor itemization: Yes; rating input score 100
  • Related-party transparency: Limited

Accountability

  • Independent voting board: 90.5%; rating input score 90; 23rd percentile among comparable filings
  • Governance controls: 9 of 9 controls in place; rating input score 100
    • Conflict-of-interest policy: Pass
    • Whistleblower policy: Pass
    • Document-retention policy: Pass
    • CEO compensation review process: Pass
    • Other executive compensation review process: Pass
    • Form 990 shared with the board: Pass
    • Board meeting minutes documented: Pass
    • Audit committee oversight: Pass
    • Independent financial-statement audit: Pass

Sustainability

  • Operating margin: 3.7%; rating input score 49; 49th percentile among comparable filings
  • Total-asset coverage ratio: 1.32; rating input score 46; 46th percentile among comparable filings
  • Liabilities to assets ratio: 0.25; rating input score 53; 53rd percentile among comparable filings
  • Officer compensation ratio: 13.8%; rating input score 10; 10th percentile among comparable filings

Growth

  • Program expense growth: 6.8% per year; rating input score 100; 55th percentile among comparable filings
  • Revenue growth: 6.8% per year; rating input score 100; 58th percentile among comparable filings
  • Asset growth: 10.9% per year; rating input score 100; 68th percentile among comparable filings

Details

  • Where the money goes: 85.7% of revenue deployed · 88% of spending went to programs
  • Governance: 19 of 21 board members independent · 9 of 9 filing controls reported
  • Programs: 4 filed program accomplishments · $19.3M in reported program spending
  • Leadership: top reported pay $562K · 33 people listed · 4 of 6 pay-setting controls reported
  • Highest-paid contractors: 5 contractors listed · $701K reported
  • Consistency: 36 of 36 current checks pass
  • Schedules: 8 filed schedules · includes major donors, grants, and executive pay
  • Filing history: 14 filing years from 2011 to 2024
  • Contacts: How to reach this organization
  • Money network: 13 filed money-flow records
  • Related organizations: 1 filed related-organization link
  • Grant readiness: Federal tax and exclusion status, award history, and grant-maker relationships.
  • People: Everyone the filings name, and which of them the filings identify by more than a name.
  • Staff and benefit plans: Retirement and health plans the organization files with the Department of Labor, and the people in them.

Key Signals

Signals prioritize questions for review. They are not findings of misconduct.

  • Moderate — Financial Efficiency: Fundraising efficiency scored 41/100.
  • Moderate — Sustainability: Operating margin scored 49/100.
  • Moderate — Sustainability: Total-asset coverage ratio scored 46/100.
  • High — Sustainability: Officer compensation ratio scored 10/100.
  • Review — Sustainability: Liabilities to assets ratio scored 53/100.