More coverage of Wounded Warrior Project – 4/21

Seems like the coverage of the WWP financial situation is slowing down. A few interesting articles for your consideration:

4/9 – David Bauerlein at Florida Times-Union – Ousted Wounded Warrior Project executives defend in their leadership of Jacksonville-based charity – This is the original article that generated the AP story I mentioned earlier. The Times-Union article is far better.

Note to the public relations, financial, and executive leadership of charities: pay attention to this article. The reporter not only understands joint cost allocation rules, he can explain the issues. Check out the section of the report titled How much really goes to veterans?

Perhaps it is just a function that I don’t get out very much, but I have noticed over the last couple of years that there are several reporters around the country who have a solid understanding of nonprofit accounting. There are quite a few reporters who are skilled at reading a 990. Keep that in mind as you interact with media.

More clearly than I have read anywhere else, this article explains Mr. Nardizzi’s regrets.  He wishes the 2014 conference had not been held at the Broadmoor. It doesn’t matter that WWP got discounts on room rates, food, and meeting space. He also wishes he had not rappelled down the side of the building.

Both of those things have given an impression the organization is wasteful.

Article sites a statement released by the board on April 8 seen the findings from the two investigative firms were presented verbally. I will give the reporters exact words – the board indicated

… such reviews typically do not result in written reports.

I haven’t worked with large charities who were in a large media controversy, so I don’t know what is typical.

Anyone else have enough of an experience base to say whether it is typical to not get a written report at the end of an investigation?

4/15 – Stars and Stripes – Ousted leaders’ decision to grow Wounded Warrior Project raised questions about spending – Dispute during a budget meeting in 2008 regarding how to allocate an expected 12% increase in funding led to a realization the organization did not have enough money to do what it wanted.

Thinking through what they wanted to do led to the realization the real goal was to impact an entire generation of vets. Having seen previous generations return home in 1946, 1954, or 1972 without major support led to WWP defining that as their goal. Not only did leadership team dream of helping a huge number of vets but they dreamed of developing far more complicated, difficult, long-term programs to help deep needs.

The leadership team realized you can’t have that kind of impact with a $12M budget that’s growing 12% a year. At that growth rate WWP’s program expenses would have been $26.5M in 2015 ( $12m * 1.12^7 ) instead of $275M.

At a 12% growth curve, it would otherwise take until the year 2036 to get that volume of impact (  $12M * 1.12^28 = $286M in 2036).

So here is the question that no one has addressed:

  • How does one grow a charity by 50% a year in order to take on a massive social problem?

Based on the WWP media coverage and my having observed the nonprofit sector for a few decades, it is exquisitely obvious that our society will not allow that rate of growth to be generated by spending more than a small percentage of revenue on fundraising.

Satisfaction survey

I previously had heard of a satisfaction survey conducted by WWP.

Article says Mr. Nardizzi says the survey showed a 90% satisfaction rate for the WWP programs.

Something got lost in the noise: The survey tool was developed by Rand Corp. The survey was run by Westat. This isn’t a survey tool developed by the overtaxed HR department and run by the fundraisers.

Article says some other big charities have similar tools. Examples listed are World Wildlife Fund and American Cancer Society.

How many other charities have such tools? My guess is there are very few. I’ve never seen such a tool at any of my clients, but I work with small NPOs, and besides which, I don’t get out very much.

4/19 – First Coast News – Wounded Warrior Project interim COO looks to the future – Interim COO Charlie Fletcher is now giving interviews.  He says his job is to look to the future, which includes where the charity is going and restoring confidence.

Not a lot of new information in this discussion. Perhaps it is a wonderful start to not have a lot of controversy arising from your first interview (at least it’s the first I’ve noticed).

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