VETERAN CHARITIES UPDATE 03: Americans gave millions of dollars in the past year to veterans charities designed to help troops wounded in Iraq and Afghanistan, but several of the groups spent relatively little money on the wounded, according to a leading watchdog organization and federal tax filings. Eight veterans charities, including some of the nation's largest, gave less than a third of the money raised to the causes they champion, far below the recommended standard, the American Institute of Philanthropy (AIP) says in a report. One group passed along 1 cent for every dollar raised, the report says. Another paid its founder and his wife a combined $540,000 in compensation and benefits last year, a Washington Post analysis of tax filings showed. There are no laws regulating the amount of money charities spend on overhead, fundraising or giving. The House Committee on Oversight and Government Reform was scheduled to hold its first hearing on veteran’s charities 13 DEC. "People want to help the veterans," said Rep. Chris VanHolland (D-MD), a member of the oversight committee. "They don't want to enrich organizations that are cynically exploiting veterans for their own personal gain. "We need to make sure that the generous contributions of Americans to veterans will help veterans and not line the pockets of fundraisers and these organizations."
The AIP’s report suggests that 20 of the 29 military charities studied were managing their resources poorly, paying high overhead costs and direct-mail fundraising fees and, in some cases, providing their leaders with six-figure salaries. The 12 charities rated as failing by the institute -- including the Military Order of the Purple Heart Service Foundation, the AMVETS National Service Foundation and the Freedom Alliance -- collected at least $266 million in the past fiscal year. The charities' practices have sparked outrage among some members of Congress. Richard H. Esau Jr., executive director of the Military Order of the Purple Heart Service Foundation, said the cost of fundraising limits how much his group can spend on charitable causes. Three emergency relief groups that are holding massive asset reserves are the official armed forces charities for the U.S. Army, Air Force, Navy and Marines, which provide financial, educational and other assistance to current and past members of the armed services and their families. These three charities have combined fund balances of $638 million yet spent only $59 million, according to their most recently available financial reports. Army Emergency Relief (AER) tops AIP's list of large asset reserve charities in relation to expenses with 17.6 years of available asset reserves and a fund balance of $307 million as of 2005. Air Force Aid Society (AFAS) has 10.1 years of available asset reserves and as of 2005 holds fund balances of $172 million. Navy-Marine Corps Relief Society (NCRS) has fund balances of $158 million as of 2005. Its years of available assets is lower at 4.8, barely low enough to keep them from earning an automatic F grade for charities having over 5 years worth of available reserves.
Daniel Borochoff, president and founder of the AIP, said many veterans charities are woefully inefficient, spending large sums on costly direct-mail advertising. "They over solicit. They love to send out a lot of trinkets and stickers and greeting cards and flags and things that waste a lot of money that they get little return on," said Borochoff, who plans to testify before Congress. The AIF gave F's to 12 of the 29 military charities reviewed and D's to eight. Five were awarded A-pluses, including the Fisher House Foundation in Rockville, which the institute says directs more than 90% of its income to charitable causes. One group received an A, and one received an A-minus. One egregious example, Borochoff said, is Help Hospitalized Veterans (HHV), which was founded in 1971 by Roger Chapin, a veteran of the Army Finance Corps and a San Diego real estate developer. The charity, which provides therapeutic arts and crafts kits to hospitalized veterans, reported income of $71.3 million last year and spent about one-third of that money on charitable work, the philanthropy institute said. In its tax filings, Help HHV reported paying more than $4 million to direct-mail fundraising consultants. The group also has run television advertisements featuring actor Sam Waterston, game show host Pat Sajak and other celebrities. Chapin, 75, the charity's president, received $426,434 in salary and benefits in the past fiscal year, according to a filing with the IRS. His wife, Elizabeth, 73, received $113,623 in salary and benefits as newsletter editor, the Post's review of the tax filing showed.
Bennett Weiner, chief operating officer of the Better Business Bureau, said the agency has 20 standards for reviewing charities, including that a charity's fundraising and overhead costs not exceed 35% of total contributions. Weiner, who is scheduled to testify before the House committee said he could not comment specifically on veterans charities until after his testimony. Advocates for veterans said they worry that scrutiny could damage military charities in general. Sen. Charles E. Grassley (R-IA), one of Congress's leading critics of charities, said some of the groups are abusing their tax-exempt status. Rep. John Serbanes (D-MD), a member of the oversight committee, wants veterans’ charities to be held accountable. "I hope there is an explanation, but it seems that most of the funds they raise never reach the veteran community," Sarbanes said through a spokeswoman. "Some of the practices being described are simply outrageous." Rick Cohen, an expert on nonprofit groups and former executive director of the National Committee for Responsive Philanthropy, called the spending decisions of some charities grotesque. "I think in light of the Iraq war and the Afghanistan war, these veterans are the people who we should really be protecting and not using as excuses or avenues for ripping off charity philanthropy," Cohen said. [Source: Washington Post Philip Rucker article 13 Dec 07 ++]
VETERAN CHARITIES UPDATE 04: The American Institute of Philanthropy (AIP), a leading charity watchdog, issued a report card this month for 29 veterans and military charities. Letter grades were based largely on the charities' fundraising costs and the percentage of money raised that was spent on charitable activities. Following is an alphabetical summary of charities and grade assigned:
Air Force Aid Society (A+)
American Ex-Prisoners of War Service Foundation (F)
American Veterans Coalition (F)
American Veterans Relief Foundation (F)
AMVETS National Service Foundation (F)
Armed Services YMCA of the USA (A-)
Army Emergency Relief (A+)
Blinded Veterans Association (D)
Disabled American Veterans (D)
Disabled Veterans Association (F)
Fisher House Foundation (A+)
Freedom Alliance (F)
Help Hospitalized Veterans/Coalition to Salute America’s Heroes (F)
Intrepid Fallen Heroes Fund (A+)
Military Order of the Purple Heart Service Foundation (F)
National Military Family Association (A)
National Veterans Services Fund (F)
National Vietnam Veterans Committee (D)
Navy-Marine Corps Relief Society (A+)
NCOA National Defense Foundation (F)
Paralyzed Veterans of America (F)
Soldiers' Angels (D)
United Spinal Association's Wounded Warrior Project (D)
USO (United Service Organization) (C+)
Veterans of Foreign Wars and foundation (C-)
Veterans of the Vietnam War & the Veterans Coalition (D)
Vietnam Veterans Memorial Fund (D)
VietNow National Headquarters (F)
World War II Veterans Committee (D)
[Source: FDVA News Clips 13 Dec 07 ++]