Wounded Warrior Project under investigation

[Anonymous]

Anonymous wrote:

Anonymous wrote:Wait a minute. Before you bitch about lavish parties, how much do those parties raise? 60% is not bad. Organizations need to run and have overhead. If they went out of business, how much would go to vets?

NONE!

You're welcome to think this way, but I work too hard for my money to give it to an organization that keeps 40% or more for overhead, parties, etc. I prefer to give to a local organization that's smaller--like a local tutoring group that works with children from a particular school in the afternoons or a local residence for children who have been removed from their homes by DFCS.

This is ridiculous and why most charities can't make an impact. Dan Pallotta has written extensively about this. You want the best professionals, but you don't want to pay them. You would rather pay someone $40K and get mediocre instead of someone with an advanced degree. If I spend $5 million on fundraising, but raise $70M, isn't that better than spending $100K on fundraising and raising $2 million? Which way gets more money to the vets. I know the second makes you feel better, but the first has more of an impact.

[Anonymous]

Anonymous wrote:CBS reports only 60% of donations are going to vets. Apparently part of the other 40% is going to lavish parties. I would think a lot goes to all their commercials and possibly paying celebs.

http://www.cbsnews.com/news/cbs-news-investigates-wounded-warrior-project-spending

Lot of high profile folks from entertainment, media, and politics are associated with Wounded Warrior Project.

Are there any laws governing what percent of donations must go to benefit disabled veterans? If not, why not?

This is kind of old news, and it's not any sort of "official" investigation -- it's CBS News, playing catch-up to the New York Times, which played catch-up to The Tampa Bay Times, which first reported this more than 2 years ago: http://www.tampabay.com/news/business/wounded-warrior-project-spends-58-of-donations-on-veterans-programs/2132493

To answer your question, the tax laws governing Tax Exempt organizations due regulate the proportion of funds must benefit charitable causes. However, the nonprofit sector is rife with abuse in this area -- there's nothing particularly special or unusual about this example, other than the fact that the cause is shrouded in extra virtue because valor. Otherwise, this is basically the same issue that sank the Komen foundation a couple of years ago.

Bottom line is the charitable sector is a $3 trillion economy, much of which doesn't really deserve tax exemption. If politicians really wanted to find revenue raisers, they could find a huge amount of revenue raisers there. Some of the shit nonprofits get away with dwarf perceived problems with corporate tax avoidance. It's just that people here "nonprofit" and automatically think "benevolence." That's not the case.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Wait a minute. Before you bitch about lavish parties, how much do those parties raise? 60% is not bad. Organizations need to run and have overhead. If they went out of business, how much would go to vets?

NONE!

You're welcome to think this way, but I work too hard for my money to give it to an organization that keeps 40% or more for overhead, parties, etc. I prefer to give to a local organization that's smaller--like a local tutoring group that works with children from a particular school in the afternoons or a local residence for children who have been removed from their homes by DFCS.

This is ridiculous and why most charities can't make an impact. Dan Pallotta has written extensively about this. You want the best professionals, but you don't want to pay them. You would rather pay someone $40K and get mediocre instead of someone with an advanced degree. If I spend $5 million on fundraising, but raise $70M, isn't that better than spending $100K on fundraising and raising $2 million? Which way gets more money to the vets. I know the second makes you feel better, but the first has more of an impact.

You seem to hold yourself in unusually high regard to make such blanket statements, or perhaps you earn money through a charitable organization; however, our contributions are definitely making a significant impact for the recipients to whom we've chosen to donate. It's not a matter of making us "feel better." When we give to a local homeless shelter, we know the money is reaching those in need. We do give money to larger groups as well, but we check out the amount kept for overhead.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Wait a minute. Before you bitch about lavish parties, how much do those parties raise? 60% is not bad. Organizations need to run and have overhead. If they went out of business, how much would go to vets?

NONE!

You're welcome to think this way, but I work too hard for my money to give it to an organization that keeps 40% or more for overhead, parties, etc. I prefer to give to a local organization that's smaller--like a local tutoring group that works with children from a particular school in the afternoons or a local residence for children who have been removed from their homes by DFCS.

This is ridiculous and why most charities can't make an impact. Dan Pallotta has written extensively about this. You want the best professionals, but you don't want to pay them. You would rather pay someone $40K and get mediocre instead of someone with an advanced degree. If I spend $5 million on fundraising, but raise $70M, isn't that better than spending $100K on fundraising and raising $2 million? Which way gets more money to the vets. I know the second makes you feel better, but the first has more of an impact.

It's not in the papers because of the 6% administrative overhead -- i.e. hiring good people. Its the 34% pure fundraising expense that is really excessive. Lots of highly rated charities hire good talent and pay well.

[Anonymous]

One thing I find particularly egregious here is how aggressively they went after other charities that also support veterans, over the term "wounded warrior" and their logo. The term existed before the charity. Spending millions of donated money on legal fees for this, and forcing other charities to spend money to defend themselves seems to be in opposition to their stated mission.

I think it's telling that they forced out their founder. I know many vets who are not their fan.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Wait a minute. Before you bitch about lavish parties, how much do those parties raise? 60% is not bad. Organizations need to run and have overhead. If they went out of business, how much would go to vets?

NONE!

You're welcome to think this way, but I work too hard for my money to give it to an organization that keeps 40% or more for overhead, parties, etc. I prefer to give to a local organization that's smaller--like a local tutoring group that works with children from a particular school in the afternoons or a local residence for children who have been removed from their homes by DFCS.

This is ridiculous and why most charities can't make an impact. Dan Pallotta has written extensively about this. You want the best professionals, but you don't want to pay them. You would rather pay someone $40K and get mediocre instead of someone with an advanced degree. If I spend $5 million on fundraising, but raise $70M, isn't that better than spending $100K on fundraising and raising $2 million? Which way gets more money to the vets. I know the second makes you feel better, but the first has more of an impact.

It's not in the papers because of the 6% administrative overhead -- i.e. hiring good people. Its the 34% pure fundraising expense that is really excessive. Lots of highly rated charities hire good talent and pay well.

Spend $5m to make $70m vs $100k to make $2m is not the issue, that's 7% vs 5%, the issue here is more akin to having numbers like spending $4.5m to make $10m

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Wait a minute. Before you bitch about lavish parties, how much do those parties raise? 60% is not bad. Organizations need to run and have overhead. If they went out of business, how much would go to vets?

NONE!

You're welcome to think this way, but I work too hard for my money to give it to an organization that keeps 40% or more for overhead, parties, etc. I prefer to give to a local organization that's smaller--like a local tutoring group that works with children from a particular school in the afternoons or a local residence for children who have been removed from their homes by DFCS.

This is ridiculous and why most charities can't make an impact. Dan Pallotta has written extensively about this. You want the best professionals, but you don't want to pay them. You would rather pay someone $40K and get mediocre instead of someone with an advanced degree. If I spend $5 million on fundraising, but raise $70M, isn't that better than spending $100K on fundraising and raising $2 million? Which way gets more money to the vets. I know the second makes you feel better, but the first has more of an impact.

The information in this article is what's ridiculous! If it takes these types of incentives to get the "best professionals," then they're looking in the wrong places for applicants.
http://www.nytimes.com/2016/01/28/us/wounded-warrior-project-spends-lavishly-on-itself-ex-employees-say.html?_r=0

[Anonymous]

Well according to the article the Disabled American Veterans Charitable Service Trust spends 96 percent of its budget on vets. I think most respected charities spend significantly more than 60% on their beneficiaries.


I work in the industry. Most respected charities must spend a LOT on fundraising. 96% is extremely rare. It kills me. Nonprofits have to compete for attention, yet no one wants them to spend money to actually draw attention to themselves.

If you worked in the industry you would know: The DAV number is not completely true. Sure, the DAV CST (the c3 arm) may spend 96% on programs. But it's because Disabled American Veterans itself is a c4 organization that pays for the fundraising and administrative costs.

Look for 990 forms for
DAV 31-0263158
vs DAV CST 52-1521276

[Anonymous]

There is lots of room to fudge these numbers-- so I am sure if they are reporting 40% to overhead it's higher. The article points out a few ways they did that (like calling their own promo materials "education").

[Anonymous]

Having 40% overhead and administrative cost seems exceptionally high to me. Imagine if the Federal government spent 40% of taxes on overhead and administrative cost. Almost everyone would be upset about that.

[Anonymous]

Anonymous wrote:There is lots of room to fudge these numbers-- so I am sure if they are reporting 40% to overhead it's higher. The article points out a few ways they did that (like calling their own promo materials "education").

Exactly!

I have no issue with 501(c)3's paying market rates for top talent, but senior executives should not necessarily expect to get what they would in a for profit business. And it's not the salaries, but some of the other expenses that I found distasteful -- for example the flashy, expensive employee functions where the CEO made grand entrances, like rappelling down the side of a building. It seems that the CEO and his team have a serious ego issue like some notorious senior execs in certain Fortune 500 companies. Charities do not need to pay for activities to feed a a "cult of the CEO"

[Anonymous]

Anonymous wrote:One thing I find particularly egregious here is how aggressively they went after other charities that also support veterans, over the term "wounded warrior" and their logo. The term existed before the charity. Spending millions of donated money on legal fees for this, and forcing other charities to spend money to defend themselves seems to be in opposition to their stated mission.

I think it's telling that they forced out their founder. I know many vets who are not their fan.

You'd be considered extremely naive. That's absolutely nothing wrong with protecting a brand you've created.

Allowing other groups to infringed on your name, at risk of tarnishing it should be just as big of a liability to donors and potential donors.

Also little wrong with working with celebrity endorsers. Fact is, it would be more shameful of the celebrity to charge full price for this work. I would imagine the work is being done in concert with their CPA.

[Anonymous]

Anonymous wrote:

Well according to the article the Disabled American Veterans Charitable Service Trust spends 96 percent of its budget on vets. I think most respected charities spend significantly more than 60% on their beneficiaries.


I work in the industry. Most respected charities must spend a LOT on fundraising. 96% is extremely rare. It kills me. Nonprofits have to compete for attention, yet no one wants them to spend money to actually draw attention to themselves.

If you worked in the industry you would know: The DAV number is not completely true. Sure, the DAV CST (the c3 arm) may spend 96% on programs. But it's because Disabled American Veterans itself is a c4 organization that pays for the fundraising and administrative costs.

Look for 990 forms for
DAV 31-0263158
vs DAV CST 52-1521276

If WWW project were in the mid-eighties on philanthropic activity spending that would be fine, even if some other orgs were spending a higher percentage. But spending only 60% (especially when it seems that they are fudging some fundraising expenses as "educational" activities) is troubling.

And what's with the big contributions to a trade association that pushes back aggressively against charity transparency and good governance efforts?

[Anonymous]

Anonymous wrote:Having 40% overhead and administrative cost seems exceptionally high to me. Imagine if the Federal government spent 40% of taxes on overhead and administrative cost. Almost everyone would be upset about that.

Ha ha ha ha. LOL!!

[Anonymous]

Anonymous wrote:

Anonymous wrote:There is lots of room to fudge these numbers-- so I am sure if they are reporting 40% to overhead it's higher. The article points out a few ways they did that (like calling their own promo materials "education").

Exactly!

I have no issue with 501(c)3's paying market rates for top talent, but senior executives should not necessarily expect to get what they would in a for profit business. And it's not the salaries, but some of the other expenses that I found distasteful -- for example the flashy, expensive employee functions where the CEO made grand entrances, like rappelling down the side of a building. It seems that the CEO and his team have a serious ego issue like some notorious senior execs in certain Fortune 500 companies. Charities do not need to pay for activities to feed a a "cult of the CEO"

Charities are a business (that provide something of positive social value). Funding is a business function of that business. The charity needs the best talent to achieve that goal and they have to pay for it.