WASHINGTON – Sen. Chuck Grassley today released the results of his inquiry into the Wounded Warrior Project, documenting problems with the veterans charity and noting that the organization has taken steps to fix the shortcomings initially exposed in news reports last year.
“It’s good news that the Wounded Warrior Project used negative findings to try to turn itself around,” Grassley said. “Some high profile charities do the opposite when confronted with problems. They hunker down instead of embracing their responsibilities to the people who are meant to benefit from their charitable mission, the donating public and the taxpayers. It’s the taxpayers who forgo revenue to the federal Treasury to make tax-exempt organizations possible. The Wounded Warrior Project is right to recognize why it exists and what it needs to do to restore the public’s trust.”
Grassley initially wrote to the Wounded Warrior Project last year after media reports of troubling conditions within the organization, including exorbitant spending on staff meetings, conferences, and plane travel for staff members and program participants. After rounds of correspondence and follow-up, Grassley acquired the information needed to put out a memo summarizing his findings. The memo is directed to members of the Senate Judiciary and Finance committees. The Grassley memo includes supporting documents that are being made public for the first time, including an independent review the charity commissioned after the troubling media reports.
Key findings of the Grassley inquiry include:
Portrayal of program expenses. The Wounded Warrior Project said it spent 80.6 percent of program expenses on veterans in FY 2014. This is misleading because that figure included millions of dollars in donated media and millions of dollars for fundraising. A more accurate figure is about 68 percent. The organization should better explain how it calculates its program expense percentage. A positive step is the organization is no longer basing the percentage on its consolidated financial statement, which yielded the higher percentage, and is using the information from its Form 990 filed with the IRS instead, which does not count donated media as a program expense.
Long-term support ad. The Wounded Warrior Project used an ad that said it spent $65.4 million on long- term support programs, such as its Long-Term Support Trust, which is also a 501(c)3. In actuality, that money was merely transferred to that trust and no money was spent on veterans. The organization is no longer using the misleading ad but needs to better inform the public of its goals with respect to the trust.
Transparency/independent review. The charity’s independent review examining the problems exposed in the initial news reports was not made public. Grassley is making it public. He urged more transparency from the organization, and the Wounded Warrior Project was accommodating. The independent review shows high spending on plane tickets and staff events and a lack of organizational structure.
Alumni event tracking. The Wounded Warrior Project’s programs for wounded warrior alumni lack oversight. These include sporting events with in-kind ticket donations that the charity said are important bonding experiences for returning veterans. However, the events often had low rates of participation, sometimes only one or two participants. The organization was not doing an adequate job of tracking the costs associated with the events such as the level of ancillary costs, which would include, for example, dinners before or after the event. The organization promised to do a better job of tracking such details. The Grassley memo notes several events involving wine festivals and casino events that may detract from the mission of offering rehabilitative services and support to wounded warriors.
Grassley’s memo concludes, “The WWP and its current leadership were open, transparent, and responsive to my inquiries. Americans want WWP to be successful for the sake of our veteran population. The changes made thus far by WWP illustrate that oversight works to bring about adjustments that result in more transparency for the donating public. WWP is rightly focused on making changes, but, more must be done. Charities serve an integral role in our society and have a tremendous responsibility to be a force for good. WWP should continue to strive to increase transparency and accountability to set a good example for others in the non-profit field.”
Grassley has a long history of overseeing how tax-exempt organizations fulfill their charitable missions and federal tax obligations. He conducted a significant amount of such oversight as chairman of the Finance Committee, with jurisdiction over the tax code, and continues the work as chairman of the Judiciary Committee.
The Grassley memo on the Wounded Warrior Project is available here.