Old money.

• Author: Georges, Christopher
• Position: Finances of the American Association of Retired Persons

Why the mighty AARP spends as much furnishing its offices as it does on programs to help the elderly

The American Association of Retired Persons (AARP) receives approximately $75 million annually from the federal government to run a pair of job training and placement programs for older Americans--two of the largest of their kind. A recent phone call to AARP's Washington, D.C., headquarters to inquire about enrollment in the programs led to the following:

The caller, after unsuccessfully attempting to explain the programs to two befuddled receptionists, was bounced to Jack Everett, an official in the organization's Senior Employment Office, who cheerfully explained that AARP offers no federally funded job placement or training programs. Everett suggested calling the Department of Labor (the agency that pays AARP $52 million to run one of the programs) for help. He also offered other ideas, like, "Try the phone book under the senior citizens section," and suggested contacting the National Council on Senior Citizens, another, smaller advocacy group for older Americans. He even threw in some job-training advice: "You'll need a resume. That's always a good first step...."

Everett's not alone. Similar inquiries at AARP offices in major cities in 16 states turned up like responses: Only six of the offices were aware that these programs even exist, although AARP literature boasts that they're offered at 108 sites across the nation. One office suggested calling Elder Temps, a privately run job-placement firm. Another advised calling the Jewish Council for the Aging. Several others suggested enrolling in an AARP job search workshop and seminar--for a fee of $35.

In a way, those phone calls distill what's wrong with AARP, one of America's largest and most influential nonprofit organizations: In its brochures, it's dedicated to helping seniors work, play, and wield power. In real life, however, helping itself seems to be Job One. "It's no more than a big business," grumbles Virginia Fine, who until last year was an officer of a California AARP chapter. "The whole Washington operation is simply geared toward making money." A close look at the mammoth nonprofit's Washington command central offers a fair amount of evidence to back Fine's charge. In 1990, for example, AARP spent about as much on office furniture and equipment as it did on programs to help its 33 million elderly members.

The world according to AARP

Why should you care? If you're over 50, odds are you're a member: More than half the over-50 population has paid the $5 dues to belong. Next to the Catholic Church, it's the largest membership organization in America. But even if you're not an AARP card-carrier, you're paying for the organization's extravagance anyway, because AARP receives, in addition to its federal grants, a federal subsidy equivalent to nearly $20 million a year.

Of course, AARP's nonprofit status also grants it something money can't buy--the trust of millions of older Americans: trust to represent their interests in Washington, to sell them worthy products, and to use their dues and fees in their best interest. For most of the organization's 34 years, the media and AARP members have accepted that trust at face value. But a peek at AARP's finances and lobbying efforts suggests that this trust may not always be well-earned.

AARP describes its mission as threefold: to lobby on behalf of seniors; sell them products and offer them discounts on other goods and services; and provide them with the chance to both volunteer their services and benefit from the volunteer work of others. For their $5 investment, members get an assortment of goodies: a subscription to Modern Maturity, AARP's bimonthly magazine (far and away America's largest, with a circulation five times that of Time); discounts from car rental companies, major hotel chains, airlines, and on American Express travel packages; and, of course, the opportunity to save money on health insurance, prescription drugs, and other products sold by AARP.

And sell it does. AARP's nine business enterprises sustain a cash flow of about $10 billion annually and revenues of nearly $300 million, with the greatest portion coming from AARP's centerpiece enterprise: group health insurance. With more than 5 million policy holders, it's the...