When a charity makes the news for being dishonorable, boy, does everyone cringe. How can people accept money from hard-working donors and then squander it?

And on what? For “paying for fundraising services and doling out cheap giveaways,” explains an article in The Huffington Post.

A CNN investigation shows that the charity “has spent tens of millions on marketing services, all the while doling out massive amounts of candy, hand sanitizer bottles and many other unnecessary items to veteran aid groups.”

I checked Guidestar for the organization’s most recent Form 990 from 2010. Here’s what it says to describe its mission and activities:

To celebrate, commemorate, promote, and recognize the work of men and women in service.”

To raise awareness of the conditions affecting America’s veterans, to address concerns of veterans, and to improve the quality of life for disabled women veterans.”

Somehow, sending veterans coconut M & Ms does not address their concerns in my books.

Here are some other interesting facts:

  • The only full-time employee taking a salary is the chief administrative officer, which in 2010 was $55, 884. One part-time secretary took home $6005. Both positions were instituted in 2010.
  • None of the officers took any pay.
  • Most of its grants and allocations were non-cash goods: shelter and relief supplies, wellness vitamins, medical supplies, legal services, food, clothing, water, hygiene and personal health products.
  • The organization did give away $209,865 in cash grants to four nonprofit groups, the largest of which was $105,000 to Disabled Veterans’ Life Memorial Foundation in Del Ray, FL. to build a memorial.
  • Fundraising expenses went to two marketing companies that managed its direct mail marketing programs and offered consulting. Total in 2010: $18,566,485.
  • Total direct mail, communications, and contract labor expenses came to: $25,486,789. This does not include advertising and promotion and other expenses.
  • IT expenses totaled $400,188.
So, the question is: Did Disabled Veterans National Foundation knowingly commit fraud, or is it simply a very bad steward of donor dollars?
What do you think?

 

Related:

Where Did Disabled Veterans National Foundation Funds Go? (Nonprofit Quarterly)

Digiprove sealCopyright protected by Digiprove © 2012 Elaine Fogel
Acknowledgements: CNN, Nonprofit Quarterly, Huffington more...
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5 Responses to Is Disabled Veterans National Foundation Fraudulent or Just Poorly Operated?

  • Elaine,
    Thank you for being the voice of reason. All of the headlines surrounding this scandal are very sensationalist using words like fraud and scam. This news is very alarming, but as you pointed out, no one employed by this organization is pocketing the money. And the board members, Precilla Willkewitz included, are all volunteers – they don’t make a dime. I think the bigger issue, and one that CNN addressed but none of the other media seemed to pick up on, is the outside fundraising consultant. Think about it, what could a charity possibly have to gain by engaging in an unsustainable fundraising plan? Absolutely nothing. Now think about this, what could a fundraising consultant have to gain by keeping a charity indebted to them with a costly/low yield fundraising campaign? According to CNNm they had about $56 million to gain. And if you recall from the CNN report, there was list of many other veteran organizations that received equally poor ratings for the same type of fundraising campaigns. These organizations aren’t scamming the public, they’re being scammed.

    • Julia, you may be right… or not. :) When we dig deeper, the Form 990 indicates that in 2009, the DVNF spent $191, 480 on professional fundraising fees, versus $71,626 in 2010. That doesn’t amount to a lot when revenue in 2010 was $24.8 million.

      What was costly were the fundraising expenses of $10.7 million for direct mail, postage, communications, and contract labor. (That includes the fees stated above.) It would be nice to see a breakdown of these expenses in order to better evaluate them.

      I’m still researching this story and have discovered some interesting things. I have an invitation out to one of the marketing companies for an interview and the president is considering it. I’ll keep you posted if I find out anything new.

      Thanks for your comment!

  • You are so right, Larry! Plus, every time a questionable charity makes the news, other charities worry that people will paint them all with one brush. And, that’s unfair.

    The nonprofit sector is held to a different standard than businesses. When a company practices in bad faith, people do not assume that every company in the same category behave the same way.

    Thanks so much for your comment! Anytime you’d like to write a guest post, let me know.

  • Thanks for the breakdown, Elaine. This is a very sad commentary on what unfortunately is not an isolated event.

    Over the years, similar stories have emerged with respect to other nonprofits that claim their mission is to help vets–yet most of the money they raise goes to anything but.

    Sadder yet is the fact that these nonprofits not only ruin their own brands. They tarnish the brands of all the legitimate veterans organizations trying to do good for the men and women who have served our nation, making it increasingly difficult for these well-run organizations to raise funds in an already difficult fundraising environment.

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