Starting with the one-two punch of critiques by CBS and The New York Times, the once pristine Wounded Warrior Project (WWP) has faced substantial scrutiny over the past month. Now that the dust has somewhat settled on the accusations, I want to provide a brief summary of where things stand from my viewpoint.
What is the Position of Charity Watchdogs?
- Charity Watch has been most consistent in its criticism of WWP and its spending practices.
- Charity Navigator has given the organization 3 stars, suggesting moderate support. But, the organization also chose to reclassify WWP’s joint costs as fundraising, giving rise to an alternate calculation of program expenses that formed the basis for much of the CBS critique. Strangely, despite its own role in the critique levied by CBS, Charity Navigator subsequently added WWP to its “Watch List” due to the negative media coverage.
- The Better Business Bureau’s Wise Giving Alliance has been quiet beyond providing WWP accreditation. But, their decision to feature WWP CEO Steve Nardizzi as an exemplar in their Building Trust Video Series is telling.
- Guidestar will stress that they are an information provider, not a ratings group. But, their CEO Jacob Harold did write a blog post trying to provide some context and offering a defense (of sorts) of the organization.
What is the True Spending Rate of WWP?
The area that has probably received the most attention in the reporting is the percentage of WWP spending that is on its programs. Charity Navigator reports a number around 60%, and the resulting complaints of 40% overhead are prevalent. On the other hand, WWP has actively disputed this reporting, claiming a program spending rate of 80%. Long story short, neither is “lying” – they are relying on different accounting treatments. If you want the long story, I provide a detailed reconciliation from the previous year’s figures here.
What was the weakest critique of WWP?
To me, the clear “winner” here is the implication that the organization spent $26 million on conferences for employees. This number reflects the spending on all conferences and events, not just those for its employees. And, as WWP points out, many of these events were for wounded veterans, not a particularly concerning use of funds.
What was the most damaging critique of WWP?
While much of the focus thus far has been on overall spending rates, I view the revelation that WWP gave a grant of $150,000 to the Charity Defense Council (an organization focused on defending charity spending on overhead and executive pay) as the most objectively harmful one. This is not a judgement about the Charity Defense Council or its mission, but I cannot imagine any circumstances under which such a grant is consistent with the intent of donors to WWP or could be considered consistent with its mission. True, the grant itself is a tiny part of the organization’s annual budget. However, the fact that it was permitted raises questions about both the decision making and oversight processes at the organization.