Wounded Warrior Project and Veterans Charities Ratings

[airdog07]

Wounded Warrior Project spends 58% of donations on veterans programs

Kris Hundley, Times Staff Writer (http://www.tampabay.com/writers/kris-hundley)

Sunday, July 21, 2013 8:12pm


Editor's note: As part of a yearlong investigation into charities across the nation, the Tampa Bay Times and its reporting partner, the Center for Investigative Reporting, asked readers in June to suggest nonprofits for closer review. Readers responded with nearly 300 suggestions. In the coming months, the Times and CIR will examine some of those charities and share what we found.
Wounded Warrior Project, created in 2003, has become one of the fastest-growing veterans' charities in the country.
It was also one of the most requested when the Tampa Bay Times and the Center for Investigative Reporting asked readers to suggest charities to investigate.
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Readers wanted to know how Wounded Warrior was using its donations and whether the charity was spending a large portion of those donations to hire for-profit corporations to raise money.
To find out, reporters examined four years of tax filings and reviewed thousands of actions by charity regulators across the nation to determine if the charity had violated laws governing charity operations.
Unlike the 50 worst charities the Times and CIR named on its list of America's worst, Wounded Warrior does not rely heavily on for-profit solicitation companies to raise money. And it does not pay telemarketers to drum up donations.
Instead, it uses a combination of fundraising events, corporate sponsorships, advertising and direct mail appeals.
Last year, the charity raised nearly $150 million.
About $81 million was raised through professional solicitors. Wounded Warrior paid 11 percent of that money to cover its solicitors' fees and the expense of the solicitor-run campaigns. In comparison, veterans charities on the Times/CIR list paid an average of 82 percent to their solicitors.
Wounded Warrior Project spends most of the money it raises counseling veterans and running sports and educational programs.
Last year, it also gave nearly $5 million to other charities, including the American Red Cross and Resounding Joy, a music therapy group in California.
Wounded Warrior also gave about $880,000 to nearly 100 veterans in the form of college scholarships and stipends for its year-long Track Program, which helps veterans transition to college and the workplace.
In its 2012 IRS filing, Wounded Warrior reported that about 73 percent of its expenses went toward programs. But the charity is one of many that use a commonly accepted practice to claim a portion of fundraising expenses as charitable works. By including educational material in solicitations, charities can classify some of the expense as good deeds.
Ignoring these joint costs reduces the amount Wounded Warrior spent on programs last year to 58 percent of total expenditures.
The charity has been criticized for its salaries, with 10 employees earning $150,000 or more. Chief executive Steve Nardizzi, whose total compensation was about $330,000 last year, said salaries are in line with similarly sized organizations.
"We're a direct service provider, dealing with some of the world's greatest social ills," Nardizzi said, referring to the charity's more than 250 employees who provide services to veterans. "We hire the best of the best and we pay them a living wage."
While the Times and CIR found no actions against the charity by regulators, Wounded Warrior has gotten mixed reviews from independent charity watchdogs. The charity meets all 20 standards set by the Better Business Bureau's Wise Giving Alliance but only gets three of four stars from Charity Navigator.
Charity Watch gave Wounded Warrior a "C+" grade, up from a "D" two years ago, based on the amounts spent on programs and fundraising.

Wounded Warrior Project Jacksonville Total cash raised: $281.2 million
Total fundraising costs: $50.1 million
Cash raised by solicitors: $139.3 million
Total paid for professional solicitation campaigns: $27 million
Total spent on programs: $147.6 million
Disciplinary actions: 0
Revenues and expenses are totals over four years based on IRS 990 filings from 2008 to 2011.

How the Wounded Warrior Project would stack up Wounded Warrior spent 11 percent of donations raised on professional solicitors' campaigns. Here's how that compares to veterans charities that made the Times/CIR list of America's worst (http://www.tampabay.com/americas-worst-charities/), based on 2011 IRS 990 filing or latest year available:
• The Veterans Fund (http://www.tampabay.com/americas-worst-charities/charities/veterans-fund-inc-the): 65
• National Veterans Service Fund (http://www.tampabay.com/americas-worst-charities/charities/national-veterans-service-fund-inc): 82
• Vietnow National Headquarters (http://www.tampabay.com/americas-worst-charities/charities/vietnow-national-headquarters): 84
• Circle of Friends for American Veterans (http://www.tampabay.com/americas-worst-charities/charities/circle-of-friends-for-american-veterans): 85
• Veterans Assistance Foundation (http://www.tampabay.com/americas-worst-charities/charities/veterans-assistance-foundation-inc): 89
• Our American Veterans (http://www.tampabay.com/americas-worst-charities/charities/our-american-veterans-inc): 89

[airdog07]

Veterans Charities Ratings


The American Institute of Philanthropy recently released a report rating various veterans charities on how well they support the causes they were created to support.

We were surprised at some of the ratings in this report; not at others. Before you donate your hard-earned dollars to any charitable organization, check it out to see how much of its revenues actually go to support its charitable purpose, and how much goes to administrative expenses, salaries, and fundraising. You may be surprised!

Letter grades were based largely on the charities' fundraising costs and the percentage of money raised that was spent on its charitable activities.

The charities that received failing grades are in red type.

The charities that received grades of A or better are in bold blue type.

Here are the December 2007 veterans charities ratings, by the AIP:


Veterans Charities Ratings

Air Force Aid Society (A+)

American Ex-Prisoners of War Service Foundation (F)

American Veterans Coalition (F)

American Veterans Relief Foundation (F)

AMVETS National Service Foundation (F)

Armed Services YMCA of the USA (A-)

Army Emergency Relief (A+)

Blinded Veterans Association (D)

Coalition to Support America's Heroes (F)

Disabled American Veterans (D)

Disabled Veterans Association (F)
Notice the similarity of the name to Disabled American Veterans

Fisher House Foundation (A+)

Freedom Alliance (F)

Help Hospitalized Veterans/Coalition to Salute America's Heroes (F)

Intrepid Fallen Heroes Fund (A+)

Military Order of the Purple Heart Service Foundation (F)

National Military Family Association (A)

National Veterans Services Fund (F)

National Vietnam Veterans Committee (D)

Navy-Marine Corps Relief Society (A+)

NCOA National Defense Foundation (F)

Paralyzed Veterans of America (F)

Soldiers' Angels (D)

United Spinal Association's Wounded Warrior Project (D)*
* See update on Wounded Warrior Project

USO (United Service Organization) (C+)

Veterans of Foreign Wars and Foundation (C-)

Veterans of the Vietnam War & the Veterans Coalition (D)

Vietnam Veterans Memorial Fund (D)

VietNow National Headquarters (F)

World War II Veterans Committee (D)


Read the complete AIP veterans charity watchdog report and veterans charities ratings.

Do you have questions about specific veterans charities?

First, check the list of veterans charities reviewed by Military-Money-Matters.com. If the charity you're interested in is not listed there, then check the references listed below the stars & stripes bar to look up information.

If you can't find the answer to your question in any of those sources, ask your questions about specific veterans charities. For ease of answering your questions, please make a separate submission for each different charity you wish to inquire about, and make the title of your submission the name of the charity. Thanks.

Read more: Veterans Charities Ratings (http://www.military-money-matters.com/charities-ratings.html#ixzz2o46LAdKU)
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[airdog07]

Charity Expose:
Veterans Charities Miss the Mark


A recent charity expose in The Washington Post indicated that Americans are being duped into making contributions to many "veterans charities" that are using much smaller percentages of their revenues for charitable purposes than donors would expect.

We want to be sure to point out that there are a number of reputable charities doing a great deal of good work on behalf of our nation's veterans, and we hope this negative publicity doesn't impact their ability to raise funds for their legitimate work.

Nevertheless, you should be aware that not all "charities" are so charitable. Here's the report:

The Washington Post
Philip Rucker, Washington Post Staff Writer
December 13, 2007

Americans gave millions of dollars in the past year to veterans charities designed to help troops wounded in Iraq and Afghanistan, but several of the groups spent relatively little money on the wounded, according to a leading watchdog organization and federal tax filings.

Eight veterans charities, including some of the nation's largest, gave less than a third of the money raised to the causes they champion, far below the recommended standard, the American Institute of Philanthropy says in a report.

One group [American Veterans Relief Foundation] passed along 1 cent for every dollar raised, the report says.

Another [Help Hospitalized Veterans/Coalition to Salute America's Heroes] paid its founder and his wife a combined $540,000 in compensation and benefits last year, a Washington Post analysis of tax filings showed.

There are no laws regulating the amount of money charities spend on overhead, fund raising or giving. But the institute's report suggests that 20 of the 29 military charities studied were managing their resources poorly, paying high overhead costs and direct-mail fundraising fees and, in some cases, providing their leaders with six-figure salaries.

The 12 charities rated as failing by the institute -- including the Military Order of the Purple Heart Service Foundation, the AMVETS National Service Foundation and the Freedom Alliance -- collected at least $266 million in the past fiscal year.

"They know how to work the system, and they seem pretty good at not going over the line, although it is pretty outrageous that so little money is actually winding up benefiting charities," said Daniel Borochoff, president and founder of the Chicago-based institute.

The charities' practices have sparked outrage among some members of Congress.

The House Committee on Oversight and Government Reform was scheduled to hold its first hearing on veterans charities this morning.

"People want to help the veterans," said Rep. Chris Van Hollen (D-Md.), a member of the oversight committee. "They don't want to enrich organizations that are cynically exploiting veterans for their own personal gain.

"We need to make sure that the generous contributions of Americans to veterans will help veterans and not line the pockets of fundraisers and these organizations."

Richard H. Esau Jr., executive director of the Military Order of the Purple Heart Service Foundation, based in Annandale, said the cost of fundraising limits how much his group can spend on charitable causes. "Do you have any idea how much money it costs to advertise? It's unbelievable the amount of money it takes to advertise in the print and electronic media," he said. "I'm very proud of what we do, and we certainly do look after everybody. F or no F, the point is we do the right thing by veterans."

Borochoff said many veterans charities are "woefully inefficient," spending large sums on costly direct-mail advertising.

"They oversolicit. They love to send out a lot of trinkets and stickers and greeting cards and flags and things that waste a lot of money that they get little return on," said Borochoff, who plans to testify before Congress today.

The philanthropy institute gave F's to 12 of the 29 military charities reviewed and D's to eight.

Five were awarded A-pluses, including the Fisher House Foundation, which the institute says directs more than 90 percent of its income to charitable causes.

One group received an A, and one received an A-minus.

Jim Weiskopf, spokesman for Fisher House, said the charity does not use direct-mail advertising. "As soon as you do direct mail, your fundraising expenses go up astronomically," he said.

One egregious example, Borochoff said, is Help Hospitalized Veterans, which was founded in 1971 by Roger Chapin, a veteran of the Army Finance Corps and a San Diego real estate developer. The charity, which provides therapeutic arts and crafts kits to hospitalized veterans, reported income of $71.3 million last year and spent about one-third of that money on charitable work, the philanthropy institute said.

In its tax filings, Help Hospitalized Veterans reported paying more than $4 million to direct-mail fundraising consultants. The group also has run television advertisements featuring actor Sam Waterston, game show host Pat Sajak and other celebrities.

Chapin, 75, the charity's president, received $426,434 in salary and benefits in the past fiscal year, according to a filing with the Internal Revenue Service. His wife, Elizabeth, 73, received $113,623 in salary and benefits as "newsletter editor," the Post's review of the tax filing showed.

[The AIP report contained these additional statements about HHV/CSAH:

"A good example of questionable in-kind items flowing through the financial statements of veterans charities is the $18,750,000 of "phone cards" that Help Hospitalized Veterans (HHV) in fiscal 2006 received and passed through to its related entity, Coalition to Support America’s Heroes (CSAH). These "phone cards," which were distributed to overseas military personnel by CSAH, were not for soldiers to call home to their family but rather to make free calls for sports scores with ads provided by a company called EZ Scores.

HHV and CSAH, who share the same president and founder, each counted $18,750,000 of the sports score cards as a contribution and program expense in their respective fiscal 2006 financial statements. These sports score cards and $2 million in donated public service airtime accounted for 85 percent of CSAH’s total program expenses reported in its 2006 financial statements."]

Chapin and other leaders of Help Hospitalized Veterans did not return calls for comment. But the charity e-mailed a statement stating that it is among "the finest veterans' charities this nation has to offer." The statement also said its "fundraising expenses, accounting methods, and executive salaries are comparable to other nonprofits in this field."

Bennett Weiner, chief operating officer of the Better Business Bureau, said the agency has 20 standards for reviewing charities, including that a charity's fundraising and overhead costs not exceed 35 percent of total contributions.

Weiner, who is scheduled to testify before the House committee today, said he could not comment specifically on veterans charities until after his testimony.

Advocates for veterans said they worry that scrutiny could damage military charities in general.

"In the rush to help, there's a lot of innovative work and good work happening, but there's also a lot of fraud and waste," said Paul Rieckhoff, executive director of Iraq and Afghanistan Veterans of America. "There's never been a greater need for veterans charities in a generation, and I hope issues like this don't deter people from giving."

Sen. Charles E. Grassley (R-Iowa), one of Congress's leading critics of charities, said some of the groups are abusing their tax-exempt status.

"Taxpayers are subsidizing that tax exemption," Grassley said through a spokeswoman. "Sitting on donors' money or spending too much on contracts and salaries doesn't benefit the public."

Rep. John Sarbanes (D-Md.), a member of the oversight committee, wants veterans charities to be held accountable.

"I hope there is an explanation, but it seems that most of the funds they raise never reach the veteran community," Sarbanes said through a spokeswoman. "Some of the practices being described are simply outrageous."

Rick Cohen, an expert on nonprofit groups and former executive director of the National Committee for Responsive Philanthropy, called the spending decisions of some charities "grotesque."

"I think in light of the Iraq war and the Afghanistan war, these veterans are the people who we should really be protecting and not using as excuses or avenues for ripping off charity philanthropy," Cohen said.

Staff researcher Meg Smith contributed to this report.

Read more: Charity Expose: Veterans Charities Miss the Mark (http://www.military-money-matters.com/charity-expose.html#ixzz2o46hzlJV)
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