WWP

Wounded Warrior Project fiasco moves into the political realm. Other comments over the weekend.

Stars and Stripes has a good article summarizing the current story and looking forward a few steps. Senator Grassley pulls the WWP story into the political realm.

3/18 – Stars and Stripes – New project for Wounded Warrior charity: Regain trust. Article discusses the dangers facing WWP in terms of public perception and the impact on donations.

Article summarizes a number of recent articles, which makes this a good survey to catch up on what’s happened lately.

I recommend the article for you because of the great way it brings together a number of different threads of the story.

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Jim Ulvog

More coverage of Wounded Warrior Project – First defenses of WWP – 3/18

Lots more discussion of Wounded Warrior Project in the last few days, including a major defense of WWP and the first public comments I’ve seen from the former CEO and COO.

3/17 – Charity Defense Council – Preliminary Media Advisory – Material Errors and Omissions Uncovered in Media Reporting on Wounded Warrior Project – This is a major discussion of the media coverage of WWP’s spending and programming.

I don’t have time to summarize the comments. Hope to do so this weekend.

If you have been reading any of my discussion of the media firestorm, you will definitely want to read this discussion. There is a large volume of information that hasn’t been mentioned in public and a large amount of interpretive comments on how to look at financial statements.

In fact, I’ll suggest you read that article before you read the rest of this post.

3/18 – Fox and Friends on Fox News – Executives fired from Wounded Warrior Project speak out – Departed CEO and COO go on camera. The segment is 7 1/2 minutes. Actual interview is only a two or three minutes since there is an intro, extro, and the headline accusations were repeated.

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Jim Ulvog

More coverage of Wounded Warrior Project – 3/16

I’ve seen a few more articles of substance in the last two days on the WWP board firing their CEO and COO. Will discuss three articles to see what we can learn about this fiasco and how to deal with a crisis.

Balancing act

The board is in a delicate balancing act.

The media and likely some major donors want the juicy details on why the two execs were let go. I’m interested, too.

The board needs to be careful on how much information they release because of legal exposures, HR issues, and the possibility of causing additional harm to the organization and constituents.

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Jim Ulvog

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. (more…)

Jim Ulvog

First day coverage of WWP firing its CEO and COO

Major news yesterday was the CEO and COO of Wounded Warrior Project getting fired by the board of directors. Here are a few articles on the story. Also, my rant on the long-running pattern of media articles that focus on trivialities.

3/10 – CBS News – Wounded Warrior Project execs fired – CBS is reporting that on 3/10 WWP fired Steven Nardizzi, CEO, and Al Diordano, COO. CBS reports preliminary results from a financial audit have been received and reviewed by the board.

3/10 – Chronicle of Philanthropy – Wounded Warrior Project Fires Top Officials After Query Into Spending Practices – Article points to CBS coverage above.  The board initiated a financial and policy audit.

In the hour since CBS broke the story, I saw several dozen articles hit the ‘net that report the story with merely a rewrite of the CBS coverage.

3/10 – Wounded Warrior Project – Board of Directors of Wounded Warrior Project Addresses Independent Review – Very tactful press release says the CEO and COO are no longer with the organization.

The independent review refuted the headline accusations against the organization and tactfully found room for improvement.

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Jim Ulvog

Today’s “overhead ratio” sparring match: Nonprofit Quarterly versus Nonprofit Quarterly.

Image courtesy of DollarPhotoClub.com
Image courtesy of DollarPhotoClub.com

For today’s lineup we have Claire Knowlton arguing charities should be funded for the full cost of their operations (including building cash reserves, additional reserves for new opportunities, and repaying debt) in order to remain healthy versus Ruth McCambridge and Alexis Buchanan body slamming Wounded Warrior Project because one line item on the 990 is more than what a couple of media reporters decided it should have been.

Let’s check out the NPQ versus NPQ match:

In this corner…

1/25 – Claire Knowlton at Nonprofit Quarterly – Why Funding Overhead Is Not the Real Issue: The Case to Cover Full Costs – In order to be able to continue delivering services to clients, charities need to be healthy enough that they can pay all their bills and have the ability to respond to opportunities.

Author suggests grants to charities should cover all of their costs, not just the immediate program under discussion in a proposal. Author introduces a new term, full cost, which is:

Day-to-day operating expenses + working capital + reserves + fixed asset additions + debt principal repayment = full costs

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Jim Ulvog

Increased discussion of Wounded Warrior Project financial statements

 

Let's do a few calculations. Image courtesy of DollarPhotoClub.com
Let’s do a few calculations before finishing this post. Image courtesy of DollarPhotoClub.com

Looks like the coverage of the Wounded Warrior Project financial statements has blossomed in the last few days. I will discuss that coverage and then discuss WWP’s public comments. Will throw in a reasonableness test of the conference expenses for no extra charge.

Rewriting the initial coverage

One of the things I have learned through blogging is that when a big story breaks there will be a few major articles covering the issue immediately. Over the next several hours many media outlets will repeat the initial coverage verbatim. I think this is done by buying republish rights from the major wire services or major newspapers.

The more fascinating thing I have learned is that over the next several hours there will be dozens of papers and wire outlets who rewrite the initial coverage. It will be done under the byline of their writer and with their copyright.

Having observed this multiple times and having read dozens of articles of follow-up, I have learned the rewrite jobs rarely bring in new information. They merely rephrase and reorganize the initial coverage, with a reference or two back to the initial article. If that was the only thing you read, you would have the impression the paper did their own original research.

I did a search on the net for coverage of WWP and noticed several dozen articles out on the same day which were nothing more than a rewrite of the initial Washington Post and CBS stories. Maybe it has always been that way and I’m only now catching on. I do find it amusing.

New coverage

Here is some coverage that goes beyond a mere rewrite:

1/28 – The Hill – Wounded Warrior charity pushes back against allegations of waste – Two of the major accusations by The Washington Post and CBS against WWP are spending $26M on conferences in total and spending $3M on a training conference in Denver. The overriding issue is essentially the same conversation about the functional expense allocation that has been in play for years.

WWP provided additional information.

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Jim Ulvog

Overhead ratios getting more attention. Wounded Warrior Project is again focus of discussion.

Working on overhead. Yeah, that's a poor joke. Photo courtesy of DollarPhotoClub.com
Working on overhead.  Photo courtesy of DollarPhotoClub.com. Yeah, I know that is a poor joke.

A running debate in the donor and nonprofit community is whether the ‘overhead ratio’ is a good tool to measure the effectiveness of a charity. There seems to be more discussion of the issue lately. Wounded Warrior Project is the focal point for recent discussion. A few articles of interest along with some background:

1/27 – New York Times – Wounded Warrior Project Spends Lavishly on Itself, Insiders Say – Tell me your thoughts on the ongoing conversations in the nonprofit community about overhead ratios and I will tell you whether you will think this article is a balanced critique or a hit piece.

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Jim Ulvog

Protecting a charity’s brand. Also, how do you hold an advocacy group accountable?

Here are two articles for your consideration. The first illustrates the idea that if you have a recognizable brand and you want to keep it for a long time, you probably ought to defend it. The second addresses the issue of how to hold organizations accountable for the context of outcome measures, in other words whether they are actually having any impact in the world.

5/7 – Steve Nardizzi at Huffington Post – Protecting the Nonprofit Brand – The CEO of Wounded Warrior Project gives a very persuasive explanation why WWP pursued litigation against charities that got too close to their name and their logo. If you’re building for the long-term and you want to have an impact for decades into the future you need to do a some things different from if you have an extremely short-term focus.

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Jim Ulvog

An illustration why interpreting functional allocation information is difficult: the Wounded Warrior Project financials

Apparently there is conflict going around on how to interpret the functional expense allocation information for Wounded Warrior Project.

All their info is laid out in their audited financial statements, which you can find here. Their annual report, audited financial statements, and 990s for the last eight years are all available on their website. Good on them for making all that info readily available. That is an example for all charities to follow.

How can three different calculations all be correct?

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Jim Ulvog