Wednesday, March 16, 2016

When Will The Veterans' Charity Malfeasance End? The Biggest Case Study

by Gary Snyder

Wounded Warrior Project is the largest veteran’s charity in the country. Since 2009, the group raised nearly $1 billion.

It is the latest veterans’ charity to get caught having questionable practices with disregard for donor’s contributions.

WWP joins many similar Veterans’ organizations that are notoriously poor in their management. Nonprofit Imperative has highlighted the fraud that has taken place on the backs of our Vets. (see a few: hereherehere). NI has probably uncovered approaching 100 questionable veteran organizations. (It is a tight race between vet charities and cancer charities, particularly breast cancer, for the worst charities)

The Wounded Warrior Project spending on conferences and staff meetings was at $26 million in 2014, a startling increase from less than $2 million in 2010. 

When Fred and Dianne Kane, major donors heard about it, they have dedicated themselves to a new cause: demanding reform at the organization. They are demanding that the CEO, Steve Nardizzi, be fired. (According to (CBSNews), he is not the only large donor to do so.) But since sources close to the organization say the board signs off on all major spending decisions and also stays at five-star hotels on the organization’s dime. They are too culpable.

“I don’t understand how an organization that has many veterans who value honor and service and chain of command can be led by a guy like that.” “I feel like I am representing all these people who have donated over the years, all these seniors over 65 sending $19 a month, all these people on fixed incomes,” said Fred Kane, one of its major fund-raisers who has raised more that $325,000. “If no one is going to talk about this right now and it has to be me, then it has to be me.” (nonprofit quarterly)

In view of the adverse publicity and a major downturn in contributions, the board hired an external legal counsel and consulting firm as forensic accounting consultants to conduct an independent and objective review of the allegations reported in the media. This work has involved the review of financial and other records, as well as interviews with former and existing employees at all levels of the organization including members of senior management and the Board of Directors. Reportedly, the preliminary results of both a financial and policy audit are now in, and the board yesterday fired not only CEO Steve Nardizzi, but also COO Al Giordano.

The board chair suggested that the issues described in the media were incorrect, but the board nevertheless found the need to terminate the two. Look for a significant settlement or lawsuit which will be paid for, most likely, by contributions.

The Daily Beast states the charity had a quarter-million-dollar annual budget for candy and soda, and spent untold sums on staff field trips and elaborately produced music videos promoting executives.

A whistleblower said: “The problems at WWP start at the top but this is a systemic problem that permeates through the culture of the organization. Ultimately, the selfish attitudes, egomaniacal actions, and self-interest led to donors being lied to and veterans being used for personal gain.”

Mr. Nardizzi, who earned nearly $500,000 annually, according to the group’s most recent available tax filings, is a longtime critic of charity ratings used by watchdog groups like Charity Navigator and CharityWatch and serves on the steering committee of the advisory board of the Charity Defense Council, which works to defend nonprofits from accusations of wasteful spending.

The Wounded Warrior Project stated that "80 percent of total expenditures (in 2013) went to provide services and programs to wounded service members and their families, but Charity Navigator calculates that the organization actually spent only 57.7 percent in 2013. CharityWatch pegs the amount at 54 percent.

Very recently, nonprofit watchdog Charity Navigator added the Wounded Warrior Project to its "CN Watchlist", citing news reports this week that detailed allegations of wasteful spending, mismanagement, and mistreatment of employees.

The group’s founder, a wounded Marine named John Melia, announced that he was interested in returning to the organization, which he left in 2009 after a dispute with Mr. Nardizzi and Mr. Giordano.

Employees say Mr. Nardizzi vanished from view, refusing to talk to the news media, stopping his weekly addresses to the staff, and even disappearing from the halls of the group’s offices. One employee who did not want to speak publicly because she feared being fired said “There was no one there to tell us what was going on or how we were going to get through this.”

Where was the board? Did the audit confirm reports that the board was enjoying the good life, also.

                                                  --------------------------------

Just today: The U.S Attorney’s Office says a married couple in California started the Wounded Marine Careers Foundation with the apparent intention to provide job training, benefits and equipment for injured Marines returning from Iraq and Afghanistan. They were sentenced for embezzling federal funds from a film school for wounded veterans they founded, a total of $400,000.

Just today: In Texas, a group of men claimed that their organization, United Soldiers Outreach, LLC, would use these donations to send care packages to American soldiers stationed abroad. It was a fake organization.









Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Charity Navigator, Vermont Public Radio, Miami Herald, National Public Radio (NPR), Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), “Betrayal”, (a movie), NBC (on Charity Fraud…TBD), FOX2, ABC Spotlight on the News, WWJ Radio, Marie Claire, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, Charity Navigator, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, USA Today Topics, Accountants News, Newsweek.com, Responsive Philanthropy Magazine, New York Times, Portfolio Magazine, The Virgin Islands Daily News, NANKAI (China) BUSINESS REVIEW, National Religious Broadcasters newsletter, The Charity Governance Blog, American Chronicle, Palm Beach Post, Detroit Free Press, Oakland Press, Nonprofit World, Socially Responsible Business Forum, PNNOnline, Ohio Nonprofit Resources, Nonprofit Good Practice Guide, Nonprofit Startup Guide, Nonprofit Blog, National Coalition of Homeless Newsletter, Finance and Administration Roundtable Newsletter, MichiganNonprofit.com, CORP! Magazine, Crain’s Michigan Nonprofit, ncrp.org, PhilanTopic, Nashville Free Press, Nonprofit Law Blog, Seniors World Chronicle, Carnegie Reporter, Assoc. of Certified Fraud Examiners Examiner, msnbc.com, Worchester (MA) Telegram and Gazette, Carnegie Corporation of America, EO Tax Journal, Wikipedia: Non-profit Organizations; Parent: Wise Austin, Accountants News, Veterans Today, Answers.com, Far-roundtable, #Nonprofit Report, nonprofithelpnews, nonprofit news; National Enquirer, Northwest Herald, The HelpWise Daily, The #Nonprofit Report, Wikipedia (Nonprofit Organization), Answers.com, Nonprofits: On the Brink (2006) Silence: The Impending Threat to the Charitable Sector (2011)
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