As I’ve watched coverage of the Wounded Warrior Project financial statements in recent months, I have been surprised by the shallowness of the coverage. Minor issues draw heavy focus while major issues remain unaddressed.
Majoring on the minors
I’ve been surprised by the heavy attention to minor issues. Much of the coverage has focused on trivialities. The Charity Defense Council article discussed earlier makes the same point in a different way.
What strikes me is a heavy emphasis on:
- opening a conference by rappelling down a wall,
- holding a conference at a fancy place disregarding the discounts WWP says they received,
- using non-GAAP metrics to evaluate charities,
- self-defining what constitutes “excessive” overhead, and
- criticizing the amount of money spent on snacks in the break rooms.
For me, complaining the amount of money spent on snacks was probably the low point of coverage. I’m waiting to read an article complaining about the premium brand of staples and paper clips used by WWP.
What I think should be discussed instead
I don’t get out a lot and perhaps there has been discussion that I missed, but I have not seen follow-up on serious issues which ought to be addressed. Here are a few topics for serious coverage:
- What is the analysis under joint cost allocation rules (colloquially referred to as SOP 98-2) for allocating donated ads between program and supporting services?
- Certain costs are difficult to allocate for purposes of the functional allocation of expenses. How have those items been allocated between programs, general & administrative, and fundraising? To start the discussion, what is the allocation methodology for salaries, rent, utilities, information technology, and advertising?
- For costs allocated to program, how have the program components been allocated between individual programs?
- Is there a broken corporate culture? Is the work environment more corrosive or less corrosive than typical for large charities? How does the corporate culture compare to businesses with 500 employees? For a really deep investigation, someone could compare the allegedly abrasive culture of WWP to the known abrasive culture of active duty military.
- What are the future plans for using the significant amount of cash and investments on the statement of financial position? Timing? If set aside for ongoing care, how will the principal of the quasi-endowment be protected?
- Is setting aside a large sum of money to fund decades of ongoing care, something in the range of say $500 million, a good thing? Why? Why not? If a good thing, what will it take to accumulate that amount in terms of time and fundraising costs?
- What is the appropriate role for non-GAAP metrics in assessing charities? The issue of developing your own, never-seen-before, home-brewed way to measure an organization is getting a lot of attention in the world of public companies. How should non-GAAP metrics be used when the self-defined ratios are the basis of criticism of charities? Should every discussion of overhead disclose who developed the non-GAAP metric under discussion?
- How do we as a society address society level problems? Please specify your solutions for discussion.
Sure seems to me there are a lot of serious questions for WWP to address. I don’t think any of them have been asked. Seems to me there are some serious questions for critics of WWP to address.
It seems to me those questions are radically more important than how much money was spent on candy and sodas in the WWP break rooms. Or whether the CEO opened a conference by riding in on a rented Segway. Or rode in on a horse. Or rappelled to the podium from the roof.