OPINION:
In 2014, the New York attorney general obtained a $25 million settlement from two fundraising companies that raised money for veterans charities — only for much of that money to go into the pockets of the fundraisers, not to the vets.
What then should we make of the prospects for the Wounded Warrior Project (WWP)?
Last week, CBS News and The New York Times reported on scandalous profligacy at the well-known WWP. According to one report, the organization spent more than $26 million on conferences, conventions and meetings in 2014 — or “about the same amount the group spends on combat stress recovery — its top program,” according to CBS. A lavish expenditure highlighted in the reports is WWP flying about 500 employees to a five-star resort in Colorado. The watchdog CharityWatch reports that WWP spends as little as 54 percent of its budget on programs.
Wounded Warriors has responded by pointing to the work it has done to help veterans. No doubt it has helped some. But the question is one of efficiency. Could it have helped more veterans if it had better spending priorities? Are five-star resorts the best way to spend donor money?
At a certain point, it seems an organization fundraises simply to continue the cycle of raising more funds. The original charitable mission loses emphasis — except in the marketing materials. But Wounded Warrior Project is far from the only charity with questionable financial practices.
The Humane Society of the United States (HSUS) holds itself out as the nation’s top animal protection organization. You’ve probably seen its ads on late-night TV, full of sad music and sad pets. But the money you give to HSUS is more likely to wind up in offshore funds than helping care for a shelter animal.
According to its tax records, only 1 percent of the money raised by HSUS is given to help local shelters care for pets. (Despite its name, the Humane Society of the United States is not an umbrella group for or affiliated with similarly named local humane societies, and it runs zero pet shelters.) Yet HSUS has sent more than $100 million to Caribbean “investments” in recent years, and puts millions every year into its pension plan. The organization even paid nearly $6 million to settle a fraud lawsuit in 2014.
Many cancer charities are also shockingly wasteful. The Breast Cancer Society only spends 11 percent of its budget on programs. Same with the Children’s Cancer Fund of America. The Cancer Survivors’ Fund is even worse, at 7 percent.
Back to the original question: What will happen to the WWP or other wasteful charities? Probably not much. Much of the data on charity waste comes from charities’ financial statements and tax returns. The Internal Revenue Service knows about what’s going on, but if Lois Lerner won’t get prosecuted, you can’t expect the IRS to take nonprofit waste seriously. (Ms. Lerner, by the way, was a member of Humane Society of the United States right around the time congressmen were writing to the IRS with complaints about the group.)
Unless and until charity spending disclosure laws are passed to increase transparency up-front for donors, the best solution is to name and shame the bad actors. CharityWatch is a good source for who’s good and who’s bad, cutting through accounting fluff that charities use and assigning fair grades to groups. It’s a better source than Charity Navigator, which has too often found itself lagging behind in exposing bad charities.
Along with shaming the bad actors, we should also praise the good ones. Veteran groups such as Semper Fi Fund, Fisher House Foundation, and Operation Homefront all are fiscally responsible, according to the latest CharityWatch guide. In the medical sphere, the Breast Cancer Research Foundation and Cancer Cares get high marks. As for animal groups, I’m a fan of giving to your local shelter or rescue.
With any charity, do your research first. Just because some group is marketing with kittens, kids or vets doesn’t mean your dollars will go to help them.
• Richard Berman is president of Berman and Co., a Washington public affairs firm.
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