Understanding AARP's Nonprofit Structure
AARP is structured as an independent, nonprofit, and nonpartisan organization. Unlike a corporation that is owned by shareholders or another business, AARP is a membership-driven entity with a dedicated mission: to empower people 50 and older to choose how they live as they age. The notion of a parent company is a common misconception, often arising from its significant size and influence. Instead of being owned by a larger entity, AARP is governed by a board of directors that oversees its operations and strategic direction, ensuring it stays true to its core mission.
The Role of AARP's Affiliates and Subsidiaries
While AARP itself is a nonprofit, it is part of a larger ecosystem of related entities that work together to fulfill its goals. This structure can sometimes cause confusion, but it is critical to understanding how the organization functions.
AARP Services, Inc.
AARP Services, Inc. is a for-profit, taxable subsidiary wholly owned by AARP. This entity is responsible for managing relationships with independent companies that offer products and services under the AARP brand. The revenue generated by AARP Services is funneled back to the parent nonprofit to support its mission and advocacy work. This includes quality control and oversight to ensure that the products bearing the AARP name meet certain standards for members.
AARP Foundation
The AARP Foundation is a separate, charitable affiliate of AARP. Its specific focus is to help end senior poverty by providing vulnerable older adults with economic opportunities and social connections. Importantly, the AARP Foundation serves both AARP members and nonmembers alike, reinforcing the broader charitable goals of the organization.
Other Affiliates
AARP also has other affiliated entities, such as the Legal Counsel for the Elderly, a nonprofit that provides legal aid to seniors in Washington, D.C., and Wish of a Lifetime from AARP, which grants wishes to older adults. These affiliates further demonstrate the extensive network of programs and services that AARP supports.
The Relationship with UnitedHealthcare
One of the most common sources of confusion about AARP's ownership is its relationship with UnitedHealthcare. It is a misconception that UnitedHealthcare owns AARP. The reality is a strategic partnership where UnitedHealthcare pays royalty fees to AARP for the use of its brand and intellectual property on specific insurance products, particularly Medicare plans.
- Licensing Agreement: AARP licenses its brand to UnitedHealthcare, a private insurer, to offer AARP-branded Medicare plans.
- Royalty Payments: In exchange for the use of its name and intellectual property, AARP receives royalty fees. This revenue is a significant component of AARP's budget and helps fund its nonpartisan advocacy, research, and educational activities.
- No Ownership: This arrangement is a licensing deal, not a parent-subsidiary relationship. AARP and its affiliates are not insurance companies.
Comparison: AARP vs. For-Profit Insurers
| Feature | AARP (Nonprofit) | For-Profit Insurer (e.g., UnitedHealthcare) |
|---|---|---|
| Primary Goal | To serve and advocate for its members and people 50+. | To generate profit for shareholders and owners. |
| Ownership | Governed by a board of directors; owned by no one. | Owned by shareholders, who expect a return on investment. |
| Funding Sources | Membership dues, royalties from branded products, affiliate revenue, grants. | Insurance premiums, investments, and other business activities. |
| Relationship with UnitedHealthcare | Licensing partner; receives royalties. | Business partner; pays licensing fees to AARP. |
| Advocacy | A powerful lobbying presence on behalf of its members. | Primarily focused on influencing policy for its business interests. |
The History Behind AARP's Independence
AARP was founded in 1958 by Ethel Percy Andrus, a retired educator, with the motto, “To serve, not to be served”. This foundational principle of service, rather than profit, has guided the organization's structure and mission since its inception. By organizing as a nonprofit, AARP was able to focus on the needs of its members and advocate for their interests in areas like healthcare, financial security, and age discrimination without the pressure of corporate stakeholders. This independent and nonpartisan status is the very foundation of its credibility and influence.
For a deeper look into the history of AARP and its mission, you can visit their official history page: https://www.aarp.org/about-aarp/history/
Why Understanding AARP’s Structure Matters
For seniors and caregivers, a clear understanding of AARP's organizational structure provides valuable context for its offerings and positions. Knowing that AARP is a nonprofit entity allows members to recognize that its primary motivation is advocacy and service, not profit. This knowledge can build trust and help members make more informed decisions about the services and products endorsed by the organization. Furthermore, it clarifies the distinct roles of entities like the AARP Foundation and AARP Services, Inc., revealing how a diverse portfolio of activities supports a unified, member-centric mission.
Conclusion: The Independent Nature of AARP
Ultimately, the question of who is the parent company of AARP? is based on a misunderstanding of its organizational status. AARP is a self-governing, independent nonprofit organization. Its complex structure, which includes charitable affiliates like the AARP Foundation and for-profit subsidiaries like AARP Services, Inc., serves to generate revenue to support its core mission of advocating for older Americans. The prominent partnership with UnitedHealthcare is a licensing agreement, not a parent-child relationship, and is a key part of how AARP sustains its operations while maintaining its independence.
