OPINION:
This week, Americans paused to honor the brave men and women who gave their lives in service to our nation. Many charities are taking advantage of this heightened awareness through the month of June by sending lots of direct mail. The goal for them is to sustain the fundraising momentum heading into July 4.
While some of these organizations are genuinely effective, others exploit the goodwill of patriotic Americans to enrich themselves. The Better Business Bureau just put out an alert about scams targeting veterans.
Last year, a record $12.5 billion was lost to identify theft, financial quick buck schemes and scams employing emotional appeals (think sick kids, abused pets and injured or homeless vets). For these causes, it’s easy to trigger a donation to help those who can’t fend for themselves.
Charity scams spike around holidays like Memorial Day and Veterans Day, when Americans are especially motivated to give. Some dubious organizations go so far as to mimic the names of well-known nonprofits, creating confusion for well-intentioned donors. One such example is “Help the Vets,” a now-defunct charity that diverted up to 95% of its $20 million in donations to the founder’s salary and benefits.
Other groups pressure donors with aggressive telemarketing tactics while concealing the true nature — or even existence — of their programs.
But scams are only part of the problem. Many veteran-related nonprofits are legally registered yet fiscally irresponsible, wasting donor money on bloated overhead or executive perks instead of veteran services. The Purple Heart Foundation spends nearly 80% of its budget on overhead despite its stated mission to “holistically enhance the quality of life” of veterans. The Veterans Medical Research Foundation is another example, spending over 72% on overhead — far from its promise of “scientific inquiry and discovery.”
According to its 2024 tax return, Vietnam Veterans of America is another overhead overspender. The similarly named Vietnam Veterans Memorial Fund has overhead spending that includes six-figure payouts to the group’s two top executives.
Some large organizations exploit legal accounting tactics to obscure inefficiency. The $94 million Veterans of Foreign Wars, for example, uses “joint cost accounting” to mask overhead as program spending. It is a method that may be legal but misleads donors.
Reliable charities do exist, and some are led by individuals who take little or no salary. Resources like Candid, Charity Navigator and CharityWatch can help distinguish effective organizations from wasteful ones. CharityWatch recently criticized Folds of Honor Foundation for claiming to spend 91% of its money on scholarships but failing to meet that mark.
At RAM Veterans Foundation, we operate CharitiesForVets.org, a uniquely free rating service that evaluates veterans charities using four key metrics. We have the most rigorous rating system among charity watchdogs because we do not grade on a curve. If a charity fails even one metric, it receives a “Not Recommended” rating.
CharitiesForVets.org is supported by accomplished retired military officers, not celebrities or paid spokespeople. None of our executives takes a salary.
Our mission is to separate the good charities from the bad ones. A charity like Air Force Enlisted Village receives a “Highly Recommended” designation primarily because it spends at least 90% of its budget on programs for veterans. H.E.R.O.E.S. Care is another example, allocating only 1.6% of its budget to overhead.
These groups put donor money to good use, while others waste it. Federal tax records reveal that 40 large poorly performing veteran charities raise more than $1 billion annually, not to mention the hundreds of smaller groups. Donors unaware of how their money is being spent are inadvertently supporting this billion-dollar problem.
Veterans and their families deserve better. They have given much to protect us. Let’s return the favor by only supporting those groups that deliver on their promises.
• Rick Berman is president of RBB Strategies and he serves on the board of the RAM Veterans Foundation.
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