"They are on thin ice right now," said Doug White, a teacher who leads Columbia University's master's program in fundraising. "In the nonprofit world, we don't have assets. We have trust. Once you let that go, it's a long, long climb back." The move by the organization's board last week to dismiss the charity's two top executives followed media reports of lavish spending and mismanagement. Since then, the charity's Chairman Tony Odierno, who is acting CEO until a new chief is found, said the board has spent "a great deal of time" talking directly with donors and alumni worried about Wounded Warrior Project's fate -- and its integrity. "We certainly understand the concerns that have been raised and we are moving to address those concerns as quickly and decisively as possible to reestablish donor trust," he wrote in an email.
Odierno said he's confident the board can right the ship now that CEO Steve Nardizzi and chief operating officer Al Giordano are out. And some donors and charity partners have expressed similar sentiments. But Odierno acknowledged in an interview with the New York Times that donations had fallen. The organization can still meet its obligations now, he said late last week, "but I am concerned about our ability to meet our obligations in the future."
Fred Kane, who raised $325,000 for Wounded Warrior Project since 2009, told Stars and Stripes this week that his nonprofit voted Saturday to dissolve and other donors were canceling their fundraising events as well. "It's a very sad thing," said Kane, who ran golf tournaments to benefit the charity. "They breached the public trust and there is going to be fallout, even with small charities that do good work."
At stake is more than just donor confidence. With more than $300 million in donations last year, Wounded Warrior Project has become a go-to charity for wounded servicemembers and veterans, counting more than 100,000 servicemembers and their families among its alumni. In addition to its signature adaptive sports and peer mentoring programs, the charity offers critical, long-term services for veterans and families of the most severely wounded that are not available elsewhere. If donations continue to fall, some programs could be threatened. "It terrifies me to think that because of what's going on -- that people would stop supporting them," said Colleen Saffron, whose husband, retired Staff Sgt. Terry Saffron, was severely wounded by an explosion in Iraq in 2004.
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There were the heavy-handed, tug-at-the-heartstrings TV ads that showed the struggles of vets dealing with severe amputations and traumatic brain injury. In print and online spots, the face of the organization is often a horribly burned veteran. The Madison Avenue-style campaign brought in scores of millions of dollars annually -- dwarfing the amounts received by other organizations -- but also giving members of these other groups pause over exactly how Wounded Warrior Project was spending its massive war chest. By 2014, Wounded Warrior Project, then a little more than a decade old, had pulled in more than $1 billion. Still, no outsiders publicly voiced concern or raised questions. "The first commandment of veterans' organizations is 'Thou Shalt Not Criticize Other Veterans Organizations,' " said a longtime official with a national veterans group who spoke to Military.com on condition that neither he nor his organization be identified. It was the same with every veterans group official interviewed for this story.
Faith shaken
"The reason we hesitated is not because we don't want to expose the charlatans out there, it's because we don't want to bring discredit upon the veterans' organization community," said another career veterans advocate. If donors or potential donors found a group was serving its own top officers more than veterans, donating to all groups is likely to take a hit, the source said. "A billion dollars!" the person continued. "This [scandal] will shake the faith of many donors. [Wounded Warrior Project's] poor behavior has shaken the faith of the average donor, who now questions if his money is being put to good use by a reputable organization."
A Wounded Warrior Project flag is hoisted on a bicycle during a 25-mile soldier ride in Germany
CBS News, in an expose on Wounded Warrior Project in January, reported the veterans' charity spent 34 percent of donations on fundraising and only 60 percent on care for veterans. The group's Form 990 tax filing for 2013 shows it spent $149 million on programs and services for its veteran clients. Charity Navigator, which scores charitable organizations, gives Wounded Warrior Project an average rating of 84.5 out of a possible 100. In terms of financials -- how a group spends its money -- it scores the veterans group at 78.5, while rating it 96 on transparency. That means it has been fairly open on how much it spends on overhead, including marketing and salaried personnel. The documents indicate the charity brought in $342,066,114 in 2013. After its program expenses -- the $149 million for veterans -- it spent $15 million on administrative costs, including salaries, and $84 million on fundraising. It then carried over $94 million in excess. Wounded Warrior Project has been criticized for its level of spending on travel, which the most recent filing shows totaled about $7.5 million, in addition to about $26 million for conferences, conventions and meetings.
The organization has also been especially criticized for the high salaries it paid its chief executives and the overly expensive travel arrangements and hotel stays they wrote off to the charity as the cost of raising money for vets. Wounded Warrior Project's Chief Executive Officer Steven Nardizzi reported a salary of $473,000. Its chief operating officer, Albion Giordano, earned just over $369,000. Chief Financial Officer Ronald Burgess had reported income of $235,000 from WWP, the document shows, while Chief Program Officer Jeremy Chwat earned 262,750. Nardizzi and Giordano have since been fired and the organization has been trying to regain the goodwill and trust it lost, officials there said. The organization has "already begun to strengthen its travel policies and the board [of directors] has committed to several other measures and policies related to expenses and training," Dan Scorpio, a spokesman for Abernathy MacGregor, a public relations firm based in New York, told Military.com. "Financial statements will be independently audited and put on the website." Eight other executives are also listed as earning between $151,000 and $252,000 annually.
Lavish spending
CBS News reported in January that organization has raised more than $800 million over the last four years. Here are a few numbers that led to the firings.
* Watchdog organizations like CharityWatch and Charity Navigator estimate only 54 to 60 percent of donations go to help wounded service members.
* Nardizzi received a salary of $496,415 in 2014.
* Spending on conferences and meetings rose from $1.7 million in 2010 to $26 million in 2014.
* Last year, the organization gave a $150,000 grant to a group that defends higher spending on overhead, executive salaries and fundraising by charities.
* The charity has a $248 million surplus, money that’s sitting in a bank account and not being spent to help veterans.
The board took action after Fred and Dianne Kane, the parents of two Iraq War veterans, called for Nardizzi to resign. Since 2009, the family has donated $325,000 to WWP through its personal charity, Tee-off for a Cause. Fred has also criticized Nardizzi’s absence from the debate since the allegations surfaced. “Where is this guy? You lead from the front — good or bad — you don’t hide,” he said, “If no one is going to talk about this right now and it has to be me, then it has to be me.”
The Wounded Warrior Project has flooded television with fundraising spots over the last couple of years and they’ve become the highest-profile military charity in the USA. Do you think this controversy will curtail giving and end up being bad for veterans? Or will citizens move on to more responsible charities. Maybe you think the criticism of WWP is unfair. Let everyone know what you think and sound off!
Sound Off: Does the Wounded Warrior Project Controversy Change Your Attitude About Military Charities?
In an interview with The Florida Times-Union, Michael Linnington said he was in the middle of an assessment that includes meeting with veterans, donors and other groups that help wounded troops. Details about the restructuring will be announced in September, but Linnington said he anticipates laying off some of the charity's 600 employees, cutting its funding for smaller veterans groups and cutting some executives' salaries.
Linnington took over as the Jacksonville-based charity's CEO in July. The retired Army lieutenant general previously led the military agency that searches for and identifies the remains of missing servicemen. The Wounded Warrior Project hired Linnington to replace former CEO Steven Nardizzi and chief operating officer Al Giordano, who were fired in March amid questions raised by New York Times and CBS News investigations into the nonprofit organization's spending. Employees and charity watchdogs alleged the charity was profiteering off veterans and spent lavishly on extravagant parties and last-minute, business-class air travel.
A six-Soldier team from Joint Base Lewis-McChord prepare to ruck in the Seattle Rock N' Roll Marathon
Linnington said his salary is $280,000. The newspaper reports that in 2013, according to the most recent tax documents available, Nardizzi's salary was $473,015 while Giordano earned $369,030. "We're looking at all of the salaries of all of our executives now, and I think that you will see them all trend down, as well," Linnington said. "That's part of trying to squeeze every nickel out of every donor dollar and to get it where it's most needed: with those who served."
Linnington said his assessment will examine how the Wounded Warrior Project spends its money, but he criticized watchdogs that fault the charity for the amount of money it invests in fundraising. "There's a certain amount of investment that needs to take place to maintain our facilities and do our advertising and do certain things that preclude us from getting to a very high percentage of donated dollars to warriors," he said.
CEO: Layoffs Expected in Wounded Warrior Project Overhaul | Military.com
Charles Battaglia is a U.S. Navy veteran who served on the Wounded Warrior Project Board of Directors from 2006 to 2015. The views expressed in this commentary are his own. Recently, the Wounded Warrior Project has been the subject of some critical media reports focused primarily on whether the organization's leadership was properly spending the millions donated by hardworking Americans each year on the wounded veterans who so desperately needed WWP's help. The reports were alarming, and while in the end many of the allegations were proven to be untrue, the concern they sparked left many donors confused and unsure about whether to continue their support. That is incredibly frightening, because the people that will be hurt the most are the ones most in need of our support.
I served on the Wounded Warrior Project's Board of Directors for nine years, and during that time I made it a point to connect with many wounded young men and women to ask them whether WWP was being helpful. Their constant refrains that "WWP saved my marriage," "WWP saved my job," or most pointedly, "WWP saved my life" convinced me of how incredibly important the life-changing programs run by the organization and the money that funded them were. The funds came in donations big and small, but they have always been critical to healing and empowering those who so bravely protected our country, and suffered bodily and often emotional harm in return. The needs of our veterans are greater than ever, and it is necessary that as a nation we continue to support WWP. Yes, this is a time of transition for WWP but, if our decisions are guided by misperceptions, it's possible that our wounded warriors will suffer the most severe consequences.
A Wounded Warrior Project flag is hoisted on a bicycle during a 25-mile soldier ride in Germany
While recent criticism raised in media reports of WWP, the nonprofit organization that was founded in the years following 9/11, may make for compelling television, these misperceptions do nothing but belittle the great work of WWP serving many thousands of veterans over the past 13 years. WWP currently provides more than 20 free, direct programs and services to warriors, their caregivers and their families. Participation by WWP's registered warriors and family members across WWP's many programs increased from approximately 1,850 in 2010 to more than 144,000 in 2015. In 2015, WWP revised its investment strategy to focus on multi-year investments, which have totaled more than $101 million in the past year, to support partners who are striving to solve the most pressing issues facing our country's wounded veterans. These efforts have the potential to redefine what it means to be a veteran service organization.
WWP's current Board of Directors recently issued a lengthy statement in an effort to clear up the misconceptions reported in the media. For instance, while the widely cited report from the charity rater Charity Navigator claimed that only 60 percent of WWP's funds go to programs, few are aware that Charity Navigator previously awarded WWP a 96 percent rating for accountability and transparency. WWP's financial statements are independently audited and have certified that WWP devotes approximately 80.6 percent of all donations directly to veteran programs. This difference in calculations is due to Charity Navigator's disregard for a widely established and broadly accepted accounting principle on tax reporting, referred to as joint cost allocation, which is used by a number of prominent charities and is subject to review by independent auditors.
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