More coverage of Wounded Warrior Project

Last week, the WWP board fired their CEO and COO.

Most of the articles I’ve glanced at in the last few days are merely a rewrite of the board’s comments on the WWP website and the initial articles from CBS and NYT.

Some substance in the last few days for your consideration:

3/14 – Prof. Brian Mittendorf at Counting on Charity – Four Unsolicited Suggestions for the Wounded Warrior Project Board – Opening line highlights the challenges for all charities of being dependent on public perceptions:

When it comes to popular charities, I am of the opinion that the general public largely believes they can do no wrong, but once the public feels they have done something wrong it’s almost as if they can do no right.

The professor’s four suggestions with a couple of comments from me.

1.Be clear about spending on advertising, mailing, and promotions

The organization should make clear the amount spent on ads and explain why that is a priority for the future programs.

2.Discuss how much advertising and promotional items are donated

I’ve not looked deep enough to see this tidbit, but apparently a large portion of the advertising is donated. That is important because donor dollars are not being used for a big share of the advertising. Donors might be relieved to see the portion of spending on ads that is donated.

3.Define and enforce a systematic process for approving expenditures

The amount of money spent on sodas & snacks or renting a Segway is a trivial irrelevancy. Article suggests there may be deeper spending issues that have not drawn attention. This is an issue that warrants serious media investigation. Candy? Not so much.

4.Identify and clearly follow spending priorities

The media has painted a picture that providing ‘fun’ events for wounded warriors is the focus of WWP. Whether this is true or false is irrelevant. That is the perception in play. The professor suggests the spending priorities need to be properly aligned, followed, and then publicized.

Check out the full article for deeper discussion of the organization than I’ve seen elsewhere.

3/11 – New York Times – After Complaints on Wounded Warrior Project, Pressure From Donors – Article provides background on how senior leadership of WWP handled issues in the last few months. Maybe I don’t get out enough, but this is the deepest and best coverage I’ve seen on the organizational response.

One donor who has raised lots of donations from friends as well as making personal contributions was so appalled at how the organization handled the situation that he pulled back giving and urged his friends to do the same.

One of the early public comments from WWP came from an ill-prepared former captain who sacrificed an arm and leg in combat. This major donor pointedly observes the CEO should have been in front of the CBS camera, not a wounded hero.

Drop in giving

Donations have dropped since this round of news started, but the organization won’t say by how much. All the interim CEO would say is the drop won’t require cutting programs.

What could that restrained comment mean?  Let’s ponder.

The FY 2014 financial statements show $410M income, $300M expenses, with $110M change in net assets. Looking back into 2014, income could have dropped by 25% and the financials would still show a positive bottom line.

From another direction, the 2014 financial statement show $23M cash and $250M of investments. That would absorb any sort of drop in giving over the course of two months.

The drop in giving in the last 60 days could be anything from very small to severe.

How not to handle media attention and hints on corporate culture

In terms of handling a public relations fiasco, here are three sentences providing a superb illustration of what not to do. Under fair use, I will quote:

The organization initially denied the accusations and demanded retractions, but then went silent.

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. His tweets and Facebook posts stopped.

Going silent is not a viable option when faced with a media firestorm.

The next paragraph quotes a staff person anonymously because of the person’s fear of being fired. The reason for anonymity is not the standard comment of speaking anonymously because he/she was not authorized to speak on the record. That statement of fear, by itself, is indicative of a corporate culture that likely has problems. Exploration of why that fear exists deserves far more attention than the CEO rappelling into a conference or how much money the organization spent on snacks and sodas.

Back to the employee’s comment – this person made the analogy that it seemed like the CEO had been kidnapped. That’s how far he withdrew.

Contrast this with what a CEO should be doing in such a situation. He should be in front of every camera that appears at the headquarters, constantly blogging, communicating to staff all the time, and walking the hallways encouraging people twice as much as he was before.

Reasons for firing CEO and COO

In one of the more significant comments in the article, the WWP board chair (who is now leading the interim Office of the CEO) said the board made the decision to fire the CEO and COO on the basis of “cultural and policy findings” in addition to financial issues.

My perception is the independent report provided to the board essentially refuted the financial mismanagement issues drawing public attention. If my perception is correct, that pretty much leaves culture and policy as the issues warranting termination of the two executives.

Methinks those policy and culture issues should be getting a lot more attention.

Sad part of the whole fiasco is one issue that is not on the table, specifically the proper level of money to spend on fundraising to develop a long-term sustainable organization. In addition, the issue of whether to use GAAP or self-defined accounting rules to interpret financial statements is on the table but has not been seriously addressed (other than by Prof. Mittendorf).

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