The American public has a strong desire to help wounded veterans as they return home. In this vein, I have recently been struck by the prominence of the Wounded Warrior Project. ABC/ESPN, Heinz, Under Armour, the NFL and the PGA Tour, among many others, have sponsored the Wounded Warrior Project and/or publicized its efforts. It led me to wonder what other charities serve wounded veterans and how they differ from one another. I decided to look into three prominent charities that seek to help wounded veterans: the Wounded Warrior Project, the Fisher House Foundation, and the Injured Marine Semper Fi Fund. Before discussing what their financials reveal about each organization, a bit on their stated missions.
The Wounded Warrior Project (WWP) states the following mission:
The mission of the Organization is to Honor and Empower Wounded Warriors. Our purpose is threefold: to raise awareness and enlist the public’s aid for the needs of severely injured service men and women; to help severely injured service members aid and assist each other; and to provide unique, direct programs and services to meet their needs. Our vision is to foster the most successful and well-adjusted generation of wounded warriors in our nation’s history.
The Fisher House Foundation (FHF) explains its main objectives in the following:
Fisher Houses are facilities constructed for the purpose of providing temporary lodging for members of the armed services and their families receiving care in military and veterans hospitals. The Foundation was formed for, and program services consist of, constructing and donating Fisher Houses to various branches of the U.S. armed services and the Department of Veterans Affairs (“Donees”), providing gratuitous guidance and supervisory, as well as monetary, assistance in connection with the Donees’ management and operation of the Fisher Houses.
Finally, The Injured Marine Semper Fi Fund (IMSFF) offers this:
The Fund’s primary goal is to provide financial grants and other assistance to Marines, Sailors, and/or family members of Marines and Sailors who have been injured or face critical illness in the line-of-duty, by assisting in meeting their financial needs.
Clearly, each organization has a similar overall goal but both the scope and approach of the missions are different. What is of interest to me is how their financial statements reveal the degree to which their objectives are being achieved.
To get a sense of scale, the total revenues for of each organization in 2011 are presented next (all data is from the respective organizations' audited financial statements covering fiscal year 2011).
The prominence of WWP is apparent from the fact that its revenues are more than three times those of FHF and nearly eight times more than IMSFF. In terms of where those revenues go, the primary measure of effectiveness of nonprofits is the program expense ratio, which indicates what percentage of the organization's expenses go to programs (as opposed to fundraising or administrative costs). The program expense ratios for each organization are presented next.
Lest one conclude that WWP vastly underperforms the others, it should be noted that any program expense ratio above 80% is considered quite good, so this information alone should not be concerning. In fact, the 83% program expense ratio is a point of pride stated on the WWP website and was sufficient for WWP to be given the BBB seal of approval. On the other hand, the data does point to the extreme efficiency of both FHF and IMSFF, which is commendable.
What the standard program expense ratio does not tell is what programs are being supported by these expenditures. It is often the case that a charity will have multiple stated objectives, and efforts to achieve any such objective fall under the program expense category. To get a feel for how these organizations really differ, consider the types of program expenses they incur. The next three charts show what percentage of program expenses go toward advertising (i.e., awareness), grants, employee compensation, and other expenditures.
Clearly, both FHF and IMSFF are focused primarily on financial assistance and grants. In particular, the grants for FHF consist of donated Fisher Houses, scholarships, and donated airline tickets for veterans’ families. The grants for IMSFF are primarily financial assistance provided directly to injured Marines and their families. WWP, however, paints a different picture, one of an organization primarily focused on raising public awareness. While it is up to donors to decide which approach they prefer to support, hopefully all will become informed before making this choice.