Wounded Warrior fires execs over spending accusations
A screenshot from the Wounded Warrior Project website.
ASSOCIATED PRESS
Steve Nardizzi, CEO of the Wounded Warriors Project, at their July 2009 meeting at the Hotel Monaco in Washington. The board of Wounded Warrior Project, one of the nation’s largest veteran support groups, has fired two top officials amid news reports accusing the group of wasteful spending.
GAINESVILLE, Fla. » Steve Nardizzi’s entrepreneurial approach to charity work transformed theWounded Warrior Project, which began as a shoestring effort to provide underwear and CD players to hospitalized soldiers, into an $800 million fundraising enterprise.
It also led to his downfall.
A lawyer by training who never served in the military, Nardizzi traded a career in the courts for one helpingwounded veterans. He arrived at the Wounded Warrior Project in 2006 after nearly a decade at the Eastern Paralyzed Veterans Association, and persuaded the board that they needed a new, more aggressive leadership style.
By 2010, Nardizzi replaced founder John Melia as CEO, and catapulted the nonprofit into the top ranks of U.S. charities. His success led to lavish spending — the group’s annual staff meeting in 2014 cost $970,000 — prompting complaints from employees, veterans and charity watchdogs about profiteering off veterans that emerged in reports by The New York Times and CBS News in January.
On Thursday, Nardizzi and chief operating officer Al Giordano were fired, the board said, as the organization cracks down on employee expenses and strengthens controls that have not kept pace with the rapid growth.
Melia, a former Marine, launched the group in 2003 after he was injured in a helicopter crash off Somalia and saw how wounded veterans were treated. His exit left him bitter; He said Nardizzi erased his contributions from the group’s website. But he told The Associated Press on Friday that he has requested an “immediate” meeting with the board of directors, and is open to leading the group again.
Board chairman Anthony Odierno, overseeing the charity on an interim basis, did not respond Friday to a request for comment. Neither did the fired executives, Nardizzi and Giordano. In the Thurdsay statement, Odierno said “it is now time to put the organization’s focus directly back on the men and women who have so bravely fought for our country and who need our support.”
The Wounded Warrior Project’s directors fired the two executives after hiring outside legal counsel and forensic accounting consultants to conduct an independent review of the Jacksonville-based organization’s records and interview current and former employees.
The reports by CBS News and The Times described extravagant parties and last-minute, business-class air travel; one former employee compared it to “what the military calls fraud, waste and abuse.”
The group’s 2014 meeting, at a 5-star hotel where Nardizzi rappelled from a tower into a crowd of employees, was particularly costly. The board’s statement — released late Thursday by the crisis management firm Abernathy MacGregor — said “such events will be curtailed in the future.”
Nardizzi, who did not respond Friday to The Associated Press’ requests for comment, defended such spending while leading the charity. “An entrepreneurial spirit led to WWP’s success,” Nardizzi wrote Jan. 18 on his Facebook page.
“If nonprofits are going to be effective in their world-changing work (eliminating disease or eradicating poverty), they must be allowed to research, to advertise, and, most important, to fail — in the same way that corporations like Apple and Nike do. We need to embrace the notion that has long guided the for-profit world: think big, and often spend big, in order to succeed big,” Nardizzi wrote.
Nardizzi certainly thought big: According to the Internal Revenue Service reports, the charity took in $800 million over the last six years, while also paying some of the highest salaries, to many more people, than other major nonprofits. Nardizzi earned $496,415 annually and Giordano $397,329, while at least 10 others took in more than $160,000 each for the year ending in September 2014, according to the nonprofit’s Form 990 filings.
Compensation accounted for $32 million, or 13 percent of the group’s spending that year. Meanwhile, the group’s reserves rose to $248 million, mainly held in investments. Charity watchdogs say it’s OK to keep a rainy-day fund, but the money should go as much as possible to the mission.
Nardizzi’s leadership drew fans. Tom Keller, a communications consultant on WWP projects, described Nardizzi as a “Powerhouse CEO” and a “superb leader” in a 2014 recommendation on LinkedIn.
Reached by phone on Friday, Keller said he no longer feels the same way.
“I have associations with other veterans’ organizations, and I just feel sick about the whole situation,” Keller said. “My involvement with (Wounded Warrior Project) didn’t last long after he came aboard. I know the truth will come out.”
The nonprofit’s Facebook page was filling with angry comments Friday by people rethinking whether they should donate again.
“Many donors have supported the WWP from its humble inception and have every right to be angry about the lack of stewardship shown by the immediate past leadership of WWP,” Melia said in a statement. “The new leadership of the WWP must do everything in its power to restore its relationship and regain the trust of those it serves and its donors.”
WWP said in response to the posts that it is proud of its programs and stands behind its fundraising.
The group’s statement Thursday said its most recent audited financial statement shows 81 percent of donations were spent on “programming,” not fundraising. The statement cited a “joint allocation” accounting rule that enables non-profits to classify fundraising as a service to clients if the event or material also is “educational” and includes a “call to action” beyond simply appealing for money.
Invoking that rule, the nonprofit reported to the IRS that it spent $26 million, about 10 percent of its budget, on conferences and events between October 1, 2013 and September 30, 2014. The statement said about 94 percent of that “was associated with program services delivered to Wounded Warriors and their families.”
The IRS filings said 76 percent of the budget, or $189,558,100, went to veterans programs — a share charity watchdogs would consider respectable. However, almost $41 million of that amount was claimed as the “educational” component of fundraising requests; without it, helping veterans accounted for just 60 percent of the budget.
Charitywatch.org says Wounded Warriors spent just 54 percent on programs rather than overhead, for a C rating.
“The board needs to look hard in the mirror and ask how things got so out of hand for so long,” Dean Zerbe, a former senior counsel for the U.S. Senate finance committee who did extensive oversight of charities. “Every dollar that is spent by WWP on perks and parties is a dollar that isn’t being spent to help a veteran or a veteran’s family.”
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Associated Press contributors include Jeff Donn in Boston, Curt Anderson in Miami and Rhonda Shafner in New York.
34 responses to “Wounded Warrior fires execs over spending accusations”
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How disgraceful. They’re taking advantage of our Veteran’s needs. Remove its non-profit status and close it down.
Send your money to DAV.
Been around since 1920.
Do excellent work, and are honest and reliable.
About time they do something about their corrupt practices. I used to contribute, but stopped when I heard what they were doing with the money. I will wait and see before considering contributing again.
They have done a lot to help me transition. A lot more than any other veterans service organization(DAV, etc.) With that said, I see where they overspend. They spend too much on their really nice offices, such as the Atlanta office, when they could cover twice as much ground with the same amount of money.(i.e. having a nice, but not really nice, office in every state as opposed to their current 17 US locations). That alone should also shrink the employee travel expenses significantly as well as improve outreach and current veteran participation in the programs they offer. Hawaii has a large veteran population, yet there are no WWP offices. In Florida, Tampa has an office due to their high concentration of veterans. Their veteran population is almost equal to that of Oahu’s, almost. Even with that, the WWP flies employees to Honolulu from San Diego. That airfare could be used in other ways. Even with the Atlanta office, their employees have to travel hours all over bordering states for some of the programs they offer. Some do this weekly.
Always go online and vent these non-profits. As a general rule,for me, if the non-profit is soliciting money on TV, I will not donate. I like to donate to a “cause’ – not to advertisements.
If their operational expenses exceed 20%, don’t donate to that non-profit.
Guidestar is one of many non-profit overview sites that you can use for free to view basics on non-profits.
Shoot for non-profits that are less than 10%, but no more than 20% on operational expenses.
60 Minutes did a great job of investigative reporting by shedding some light on the dark corners of this organization and its executive whose actions were an insult to wounded veterans and those who sought to help them.
Cell–I agree. What bothers me is how long it has taken the Board of Directors to expose this fraud–don’t they read the newspapers or watch TV news??? Another thing–the Hale Koa had a huge fundraiser for them about a month ago and I questioned the volunteers about the excessive spending they did and was ignored. Now, the lobby at Tripler has magazines with coupons attached to contribute to this fraud.
Another non-profit scam. Using the sympathy, goodwill and monies from charitable donors to enrich themselves and give themselves perks. Another “charity” that spends 60% plus on the top administrators. And up to 90% on overhead. Leaving 10% to actually doing something.
Despite the action of the board, methinks they also did a bit of coverup. What of board perks and malfeasance. Right, the foxes in the board have probably covered themselves and their transgressions.
If you go on those websites that rate charitable orgs RIGHT NOW, you will find that Wounded Warrior actually was looking pretty good in evaluations. That is before this shake up. Now, it’s apparent that someone was cooking the books.
You won’t see me donating ever again to this group. Smoke the ceo and his chief administrator, but hide the transgressions of the board. That’s what this preemptive action smells like.
Just like I don’t donate any more to the UH Foundation. Found they were using A & S designated funds to send athletic football scouts on all expenses paid “scouting” junkets. It’s always fund the jocks, and little for academic scholarships.
Most nonprofits are corrupt. I’ve noticed a lot of organizations promising to research diseases never do anything.
Gov’t should also check other charities. I bet WW is not the only one.
Why the gov’t?
Hand caught in the cookie jar?
They are still advertising on TV. Donate — we like monthly gifts.
Wow, I can’t believe some of the comments here, but the worst was “…close it down.” The Wounded Warrior Project is a great program, too bad it was led astray by overzealous, corrupt leadership. Allow the organization to regroup and refocus its mission, and then give it another look. The problem was its leadership, not the Veterans it was created to help. Once or twice each month, the Wounded Warriors paddle 6-man outrigger canoes off Marine Corps Base Hawaii, in Kaneohe Bay, as an alternative to their regularly scheduled physical training. Each and every one of the men and women enjoy the experience, just ask them. It’s rewarding for them and those of us fortunate enough to assist in the endeavor. The Wounded Warrior Project is a great program, and will be even greater when it straightens out its management issues, and reestablishes its goals.
No one wants to donate money to an untrustworthy charity. This is the kiss of death for a charity.
Employees of such an organization are often overwhelmed by the large amounts of donations($372 millions) collected and begin to think of ownership of the funds as belonging to them, thus the extravagance of their travel and other related expenditures needed in the donation collection business which should be nominal. As an auditor, examined 2 separate tax-exempt organization operations. In one, only the clerical staff were paid normal wages as the officers were voluntary/elected; while other the executive secretary earned 55% of the donation generated and staff was paid the standard going rate for the community.
The very best lecture I ever had in my training as an administrator came from the head of our Budget Branch. He told us “There’s only one thing I want you to remember from my one hour talk today. Remember, It’s not your money.” Those five words served me very well over the last few decades; especially when I saw people who didn’t learn this one simple lesson.
It’s too bad this has happened. The Wounded Warriors helps a lot of veterans in need, but with this scandal, I am sure donations will fall off considerably. This also sends a message to the public to be cautious about donating based on TV advertising. Do some research before making a commitment.
wow there should be a rule of thumb …EXAMPLE 55 MAXIMUM FOR ADMINISTRATION INCLUDING ALL EXPENSES
The Angel of Light. He is clean cut, clean shave, nice haircut, nice appearance, good manners, well educated, and so on. A wolf in sheep clothing. The devil is smarter then you think. He’ s a snake!
More than 2 people need to be fired.
Wounded Warriors preys on gullible, uninformed donors over the age of 65, so, logically, where have you seen WW television commercials recently? Of course! On the Republican debate telecasts.
Listen to yourself. Do you really believe this crap that you trowel out or are you just unbelievably short on intellect? You’re quite an embarrassment to yourself. Get the hint?
see: http://www.nytimes.com/2016/01/28/us/wounded-warrior-project-spends-lavishly-on-itself-ex-employees-say.html
The Board of Directors did the right thing by removing these two, but where was the Board when this stuff was going on? Maybe they should resign, make it a clean sweep.
Anyone who contributes to an organization that promotes “a humanitarian cause” through tear jerking commercials have no one to fault but themselves. I get so turned off that I press the mute button every time such commercials are aired.
Ask Aloha United Way to open their books – probably would shocking how they “waste” your money, especially for bloated salaries. What has been rumored in the past is that Kim Gennaula and hubby Guy were living the high life while she was the prez at AUW which led to her leaving.
Should even take a closer look at the Hawaii Community Foundation.
I had made several donations to WWF, then read of their lavish spending. Wrote them a letter (like they care) regarding the spending so I am glad to see there were lots of us who felt it was not necessary. Nardizzi was collecting a salary about $375,000 and while a CEO does deserve to be well paid, so much more could go to those who need it. Reading about their lavish spending was SO disappointing. Now that this has occurred I will be more inclined to start up donations again. God bless those men and women who have served and do serve our country.
I used to contribute to Wounded Warriors but stopped after learning how much their upper crust officials were being paid and how little money was filtering down to
help the wounded warriors so this news is nothing new to me. I often wondered how they were paying for all the commercials that they ran non stop on the major networks
and all the celebrities that they had on their commercials. Best thing you all can do is to go to the Charity Navigator website to check on any charity that asks you for a donation.
Not all charities provide information to Charity Navigator but a large number do. If in doubt, do not donate and donate to local charities that you know are for real and that do
really help as many of these national charities claim to do. Some of them are just scams,
Obtaining a 501-c status should come with proving that at least 75% of funds raised goes to recipients. This Steve guy should get prosecuted for his fraud scheme of a non-profit.
Better not to give to large charity groups, this is more common than people think.