In the non-profit world, there is one place charities DO NOT want to be, and that is on the Charity Navigator Watch List. Thanks to an article in the New York Times on January 27, along with some other damaging publicity, the vaunted Wounded Warrior Project landed in what amounts to no man’s land.
“Placing a charity on the Watchlist is a way of letting donors know that there is an issue of concern that they should take into account before they donate to that charity,” Sandra Miniutti, a vice president at Charity Navigator, told The Daily Beast. “We have a committee that meets each week. They review the information that has come to our attention about a particular charity and determine if it should be placed on the Watchlist, Donor Advisory list, or neither.”
In the case of Wounded Warrior Project, the troubling information publicized is a combination of the Chief Executive Officer’s salary ($473,015 in 2014 per audited financial statements), 19% administrative overhead that may or may not be all of it depending on how program expenses are counted, and lavish spending including holding an all-staff planning meeting at a five-star hotel in Colorado Springs celebrating a record fundraising year of $225 million, which was described in detail in a New York Times story. However, in this writer’s humble opinion that is not the worst of it.
As bad as all of that is, as a veteran of the non-profit world, the reality of having assets just under $250 million, most of it in cash, for an organization that is all about “empowering” combat veterans when so many of them are homeless is simply scandalous.
To pick apart the complaints from someone who has worked on the inside of the non-profit world (that would be me):
- The CEO’s salary for the amount of fundraising done, is actually not out of line, but for people who are living on public assistance, the streets and/or paycheck to paycheck, that amount of money to an individual who is working in an organization that is supposed to be “non-profit” is most unseemly. The group responsible for approving the CEO’s salary are the Board of Directors. They are the ones who have to approve a budget. Ultimately, the buck stops with them.
- 19% administrative overhead – including fundraising expenditures that most likely encompasses prime time advertising space on Fox News, and celebrity endorsements – is absolutely double what is generally accepted as the norm for non-profit (even Planned Parenthood). Anything over 10% should be questioned. At least 90% of income needs to go to programs for those the organization is intended to help, or in grant-making if the organization does that as that is considered a program (WWP does provide grants). In the case of Wounded Warrior Project, after a good look at the financials available on their website, which some former employees claim have line items that have been parsed to make the numbers look better, there is a lot of what is known as “in-kind” donations, meaning donated space, product, or time that has value, that inflates this figure, but still…19%.
- Holding planning meetings in a five star hotel for all staff…that is something that a for-profit company would do.
Which brings us to what does Wounded Warrior Project exist to do and accomplish? In non-profit, always look for the mission statement:
To honor and empower Wounded Warriors.
Wounded Warrior Project publicly goes a step farther.
To foster the most successful, well-adjusted generation of wounded service members in our nation’s history.
- To raise awareness and enlist the public’s aid for the needs of injured service members.
- To help injured service members aid and assist each other.
- To provide unique, direct programs and services to meet the needs of injured service members.
All noble goals, but really, considering the humble beginnings of John Melia, a Desert Storm Marine, just handing out backpacks to wounded soldiers leaving the hospital in 2003, these are fairly grandiose expectations of an organization that is only thirteen years old. According to the New York Times piece, Mr. Melia is no longer with WWP after a dispute with the current CEO, Steven Nardizzi (and listed founder, although that claim is somewhat in quesiton), over vision for the organization. Melia wanted to remain the romantic ideal of a non-profit with hands-on programs for the veterans, while Nardizzi wanted to follow a “for-profit” model.
(Writer’s aside: all “non-profits” have the goal of higher fundraising levels, or profits, more or less. If they didn’t have those increases, Charity Navigator four star ratings would not be achievable.)
Using wounded warriors as a selling tool, it was not difficult to tap into the sympathies and patriotism of the nation, and other veterans, hence the fundraising success. The problem WWP has at this time is not that or name recognition, a common hurdle in fundraising. The current problem is that they’ve made so much money that the donors and various people they serve are thinking that Nardizzi and his crew are using donations as their personal ATM machine, paying for only the best and spending cash that could be put to better use. From The New York Times:
But as donations poured in, many former employees say the group became wasteful.
“People could spend money on the most ridiculous thing and no one batted an eye,” said Connie Chapman, who was in charge of the charity’s Seattle office for two years. “I would fly to New York for less than a day to report to my supervisor.”…
Former employees said they questioned the charity’s focus on money and marketing techniques. Erick Millette, an Iraq veteran, said he quit after growing disillusioned about his work with a program called Warrior Speak, which involved veterans’ telling their stories of healing to audiences. The veterans collected donations at those events.
“I wasn’t speaking anywhere unless I was collecting a check,” said Mr. Millette, who worked for the program for about two years, until he left in 2014.
Mr. Millette said the charity encouraged him to highlight its role in helping him recover from PTSD and traumatic brain injury. “They wanted me to say W.W.P. saved my life,” he said. “Well, they didn’t. They just took me to a Red Sox game and on a weekend retreat.”
And that sort of thing is the main knock against WWP from those who have sought their services. Their help is shallow at best is the claim from many veterans. They like splashy pictures and events. The quality of the programs have eroded as the quota for number of veterans helped has risen. Without a drill down on the program expenses and records, details of how money could be more efficiently allocated just is not doable, but unreachable quotas will always impact the quality of service (even in business).
There are additional complaints and comments about hiring and firing practices in the NYT article, that indicate the people in control of WWP set unrealistic expectations for staff, and truly only looked at the bottom line in making “business” decisions. Loyalty is an important concept in the culture there to the point where questioning the higher ups frequently resulted in terminations. This is no different than any other non-profit, but the incidents described are particularly brutal and unfair. (The CEO is a lawyer by education, and not a veteran. Let that sink in.)
The reality is that with the true original founder not making day to day decisions, WWP lost its way, and its integrity as an organization. Yes, WWP does now have name recognition and a lot of cash, but they are not living up to expectations of what donors think a non-profit should be: life in a not fancy building, shoestring expenditures and helping those in need. That is what landed Wounded Warrior Project on the Charity Navigator Watch List. Getting off of it is going to take some doing on their part.
As for non-profit, when looking to donate to an organization to help others, be it a food bank, disease related charity, one that serves veterans, etc., local charities need your help just as much as the national ones do. They also have much lower overhead expenses, and tend to be more of the shoestring operation that donors expect to see when giving of time, treasure or talent. This writer has worked in both. Always check the financials as reported before taking the plunge.