The New York Times isn’t finished with its investigative reports on the National Association of Realtors (NAR).
Last year, journalist Debra Kamin exposed allegations of sexual harassment and a toxic work environment within NAR, amplifying widespread scrutiny at a time when NAR was already dealing with multiple lawsuits and an investigation with the DOJ.
And Kamin’s latest article— released today—dives into NAR spending habits, something we’ve also examined here at BAM. As a nonprofit trade organization, NAR’s tax filings are public, offering a window into its financial priorities. The latest documents from 2022 reveal significant salaries, along with tens of millions going to independent contractors.
For her latest report, Kamin spoke to 18 former officers and former and current employees of NAR, and examined spending practices that have left many Realtors questioning, “What am I paying for?”
Tune in for the full breakdown of the NYT exposé on today’s Real Word, and keep reading for the key details.
NAR Leadership and the “Culture of Excess”
When Bob Goldberg became CEO of NAR, he gained not only a substantially higher salary but a lavish compensation package, including:
- Membership fees for private clubs in Chicago and Washington, as well as a country club of his choice—including an initiation fee of up to $75,000
- First-class airline tickets for him and his wife
- Monthly car allowance of $1,500
- $2,250 a month to cover utilities and insurance at his Chicago pied-à-terre
- Paid pet sitting for when Mr. Goldberg was away from home on business
All that came on top of his $1.2 million salary, which more than doubled to $2.6 million in five years.
The generous package is consistent with NAR’s free-spending culture, which has drawn critical attention from more than one media watchdog.
The NAR president, president-elect, and first vice-president are elected by members. All of them receive annual six-figure payments while NAR continues to describe them as “volunteers.” They have corporate credit cards and use them on work trips to cover expensive dinners, massages, golf outings, and sports tickets. When Hamilton opened on Broadway in 2015, a number of NAR leaders used their corporate cards to buy tickets for themselves and relatives as a perk while they were in NYC for a conference.
Speaking in defense of these practices, Mantill Williams, a NAR spokesperson, credited leadership with raising their hands to serve the industry in positions that “require a substantial time commitment, personal sacrifice, and significant travel.”
Williams also explained the money (annual payment and other compensation) was to reimburse leaders for travel expenses and “administrative stipends” to offset the income they weren’t able to earn as Realtors while performing their leadership duties.
He didn’t comment on specific uses of the corporate card, like massages and event tickets, let alone how the lavish personal spending aligns with NAR’s goals as an advocate for real estate agents.
Goldberg, who stepped down from his role as NAR CEO in 2023, chose not to comment.
Red Flags from Nonprofit Experts
Nonprofit law experts told Kamin that NAR’s spending habits raise concerns. They argue that the organization’s financial habits may push the boundaries of acceptable behavior for a tax-exempt entity.
The six-figure payments to leaders, referred to as “volunteers,” are particularly controversial. Jeff Tenenbaum, a nonprofit lawyer based in Washington, D.C., described this as “highly unusual — I would even say virtually unheard-of — for volunteer leaders and officers to receive compensation at those levels.”
Beyond excessive compensation, NAR’s spending on personal benefits, such as first-class airfare for spouses and stipends for luxury retreats, could pose legal risks. Audrey Chisholm, Founder of the Chisholm Law Firm in Orlando, Fla., emphasized that “If an organization is engaging in private inurement, and individuals are benefiting themselves beyond what’s considered reasonable, that would be grounds to lose their tax exemption.”
Paving the way for an industry backlash
Aside from NAR’s legal issues, many of NAR’s 1.5 million members (at the latest count), who contribute 87% of NAR’s revenue, have noticed the disconnect between leadership and the average Realtor paying dues to three different Realtor associations to access the MLS.
It doesn’t help that NAR leadership appears more than ready to spend Realtor dues on personal luxuries when many are struggling to cover those dues and stay in business.
Hence the reason for the three antitrust lawsuits recently filed against NAR for its anticompetitive behavior—including the latest aimed directly at the NAR’s three-way agreement.
NAR’s continued defense of this policy is sounding more like a blanket dismissal of the disenfranchisement a growing number of dues-paying members are feeling right now. And with the NY Times article calling out NAR leaders for its culture of excess, it may be only a matter of time before the association has to take on a more accommodating tone.
NAR leadership may be slightly less worried about the Department of Justice (DOJ) amping up its investigation into the trade group—especially with recent speculation that the newly–elected president will “clip its wings.” But we may not need the DOJ to call NAR onto the carpet for blowing member dues on frivolous personal expenses.
Charity organizations and non-profits both have similar rules in place to prevent the use of member dues for personal benefit. Unfortunately, such rules are rarely enforced.
The generous payments and perks enjoyed by NAR executive leaders are an incentive for Realtors to climb the corporate ladder, as Rob Hahn, aka Notorious ROB, pointed out, saying, “For a lot of people, as you rise in leadership, travel allowances become an all-expenses-paid free vacation.”
The problem with NAR’s leadership structure is that it encourages the creation and maintenance of an echo-chamber that discourages divergent thinking about the trade group’s spending habits.
Byron Lazine and Nicole White touched on this issue in last week’s episode of The Real Word. Reflecting on the organization’s future and the need for reform, Lazine shared his perspective:
Maybe the only way to make the change that we need is to influence from the inside…Maybe NAR is going nowhere. And the only way for agents of change to change it is to be involved—locally and/or nationally.
