January 28, 2016

Wounded Warrior Project: Is the charity wasting your donations?

In December I published a post about checking up on nonprofit charities before donating, specifically to ascertain the charities spend donations prudently.  When discussing charitable contributions with my financial planning and tax clients, I generally counsel clients to consider a charity efficiently run if at least 75% of its budget is spent on the programs and services the charity delivers.  This is also the benchmark suggested by Charity Navigator, an organization that evaluates and rates charities.

Fast forward to today, when the New York Times published an article critical of the Wounded Warrior Project charity, a nonprofit organization that provides aid and assistance to wounded military service members.  The article criticizes the charity for, among other matters, improper and lavish spending (including unnecessary air travel and $500 per night hotel accommodations), and questionable employee terminations.

How does the Wounded Warrior Project compare to other large charities?  According to Charity Navigator, 59.9% of Wounded Warrior Project's expenses are spent on charitable programs and services.  Comparatively, the American Lung Association spends 94.0% of its expenses on charitable programs; the American Cancer Society spends 60.6% (nearly identical to the Wounded Warrior Project), the American Red Cross spends 90.3%.

A Witch Hunt?

While I do find merit in today's New York Times article, it does seem - to me anyway - that author Dave Phillips shows bias against the Wounded Warrior Project, conjuring a bit of a witch hunt adverse to the organization.  For instance, Mr. Phillips focuses on 18 disgruntled former employees without providing similar attention to satisfied former or current employees.  And was it really necessary to mention that the charity is headquartered in a "four-story headquarters in a palm-lined office park"?  I'm surprised Mr. Phillips did not also comment on the building's furnishings.

Readers can form their own ideas about the Wounded Warrior Project and related charitable donations.  As I've stated before, a little bit of investigation will provide peace of mind knowing that your charitable donations are well spent.

Please contact me if you have questions about financial planning or tax matters.  For information about my nationwide Consulting, Expert Witness, and Tax Services visit Fouts Financial Group.

Mary Rae Fouts

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