This story has been updated.
WASHINGTON — Wounded Warrior Project said last week’s dismissal of two top executives has brought order to the popular veterans charity, but recipients of services are worried, donors are jittery and experts contend it’s not going to be that simple to regain the public’s trust.
“They are on thin ice right now,” said Doug White, a teacher who leads Columbia University’s master’s program in fundraising. “In the nonprofit world, we don’t have assets. We have trust. Once you let that go, it’s a long, long climb back.”
The move by the organization’s board last week to dismiss the charity’s two top executives followed media reports of lavish spending and mismanagement. Since then, the charity’s Chairman Tony Odierno, who is acting CEO until a new chief is found, said the board has spent “a great deal of time” talking directly with donors and alumni worried about Wounded Warrior Project’s fate — and its integrity.
“We certainly understand the concerns that have been raised and we are moving to address those concerns as quickly and decisively as possible to reestablish donor trust,” he wrote in an email.
Odierno said he’s confident the board can right the ship now that CEO Steve Nardizzi and chief operating officer Al Giordano are out. And some donors and charity partners have expressed similar sentiments.
But Odierno acknowledged in an interview with the New York Times that donations had fallen. The organization can still meet its obligations now, he said late last week, “but I am concerned about our ability to meet our obligations in the future.”
Fred Kane, who raised $325,000 for Wounded Warrior Project since 2009, told Stars and Stripes this week that his nonprofit voted Saturday to dissolve and other donors were canceling their fundraising events as well.
“It’s a very sad thing,” said Kane, who ran golf tournaments to benefit the charity. “They breached the public trust and there is going to be fallout, even with small charities that do good work.”
At stake is more than just donor confidence. With more than $300 million in donations last year, Wounded Warrior Project has become a go-to charity for wounded servicemembers and veterans, counting more than 100,000 servicemembers and their families among its alumni. In addition to its signature adaptive sports and peer mentoring programs, the charity offers critical, long-term services for veterans and families of the most severely wounded that are not available elsewhere. If donations continue to fall, some programs could be threatened.
“It terrifies me to think that because of what’s going on — that people would stop supporting them,” said Colleen Saffron, whose husband, retired Staff Sgt. Terry Saffron, was severely wounded by an explosion in Iraq in 2004.
Doctors at the Department of Veterans Affairs worked to rebuild the sergeant’s face and jaw, but his brain damage went untreated for years. He lost his ability to find words and he required a constant companion to remind him to do normal things such as walk around or eat.
In 2010, Saffron, who lives in Harker Heights, Texas, became one of the first batch of severely wounded veterans to join Wounded Warrior Project’s new independence program that sent therapists to his home and custom-tailored treatment to his needs.
First, a speech therapist came in three days a week. Then an occupational therapist who helped him through his daughter’s wedding rehearsal. Now he has a life skills coach, Saffron said. It changed both their lives.
“I wish I could get people to understand how important that program is to our lives,” she said.
What went wrong
Wounded Warrior Project came under fire in January after CBS News and the New York Times interviewed dozens of former staff members accusing the organization of spending lavishly on events and public relations and creating a toxic culture that did not tolerate criticism.
The reports, citing the charity monitoring website Charity Navigator, said Wounded Warrior Project was only using some 60 percent of its more than $300 million in donations for programming. A key issue: a $26 million line in the charity’s 2013-2014 tax forms identifying spending on events and conferences. That figure was widely used to highlight anecdotes from staff about lavish parties, staff meetings at high-end hotels and ostentatious presentations by Nardizzi in which he arrived at one event on horseback and at another by rappelling down the side of a building.
In a statement last week, the board said an independent audit conducted to review the allegations found 80.6 percent of the organization’s donations were spent on programming, and of the $26 million spent on conferences and events, approximately 94 percent, or $24.4 million, “was associated with program services delivered to Wounded Warriors and their families.” It also found “the vast majority of paid air travel has been in economy class,” with less than one percent of employee travel in first or business class.
The board also noted WWP uses an accounting methodology, known as joint cost allocation, common among nonprofits, but disregarded by organizations that monitor charity spending.
However, the board said it was tightening its air travel and spending policies after the review found “that some policies, procedures and controls at WWP have not kept pace with the organization’s growth in recent years.” Nardizzi and Giordano were out, it said, “to best effectuate these changes.”
“Steve Nardizzi and Al Giordano led the charge on groundbreaking life-saving initiatives,” Odierno wrote in his email to Stars and Stripes. However, the board came to the conclusion that new leadership was needed to move the organization forward.”
On Friday, Nardizzi defended his approach to spending to Fox News, saying if donors and supporters understood the complexity of the services that Wounded Warrior Project provides, they would understand the need to spend on external resources.
But, he apologized that some of his actions had reflected badly on what the organization does.
“I’m not perfect,” Nardizzi said. “The organization is not perfect and we’ve clearly made mistakes along the way, despite the great success of the organization. And looking back, one of my regrets is that I allowed a few activities that we did – small time, during a conference, intended to boost employee morale dealing with warriors in crisis – I allowed that image to be used by the media to really misrepresent who we are and what we do as an organization. And for that – to our donors and supporters, I apologize personally for that.”
Nardizzi and Giordano said the audit showed most of the spending allegations were untrue. Nardizzi said he was disappointed by the board’s decision to remove him, but he recognized the organization’s need to move forward.
Forward or Backward?
As the board looks for new leadership, one movement underfoot is to bring back the old guard. John Melia, the founder of Wounded Warrior Project, said he’s open to coming back to the organization. Melia said Nardizzi and Giordano pushed him out five years ago over how best to grow the charity.
In an interview with Stars and Stripes this week, Melia said he believed in slow and steady growth that would allow WWP to manage its spending more carefully, while Nardizzi’s vision was to grow rapidly, using an aggressive public relations approach and broad television advertising that made Wounded Warrior Project a household name. Nardizzi’s salary climbed to more than $473,000 in 2014 and fundraisers became huge parties. And reports said the organization also aggressively challenged other charities for using the terms wounded warrior or a silhouetted soldier logo.
Nardizzi has argued in media interviews over the years that the up-front spending on marketing allowed the organization to expand and offer more services throughout the country at a matching pace – comments he made again Friday. WWP grew its programs to numbering more than 20, including programs as far-reaching as creating hospital networks to better coordinate the treatment and study of post traumatic stress disorder and brain injuries. But critics said the organization spent irresponsibly and lost its down-to-earth character that appealed to veterans.
“The optics are terrible,” said Melia, a former Marine who founded the organization in 2003 after he recovered from severe burns across his body from a helicopter crash in Somalia that killed four of his buddies. “This is why veterans lost confidence in Wounded Warrior Project.”
Melia said he watched from the outside as he believed the organization lost sight of the difference between programs that help veterans and ones that are used for public relations.
“It would continually make me ill to watch wounded veterans paraded around like victims,” he said. “I will be damned if any vet will be paraded in that kind of demeaning fashion for the purpose of putting money in the coffers.”
A petition on Change.org urging Odierno and other members of Wounded Warrior Project to “Reinstate John Melia as CEO of Wounded Warrior Project” has more than 480 supporters and more than 800 people have “liked” a Facebook page entitled “Restore Trust,” in which Melia and his brother Jim have been promising to make sweeping changes if WWP is entrusted to them.
On the Facebook page, Melia has posted 10 changes he would institute if he is asked to serve as CEO. Among them, he promised to review all salaries, put an end to bonuses, create a position for an officer of integrity and compliance to serve as an internal auditor and immediately suspend all television marketing.
On both pages, comments from former staff members and alumni supporting Melia welcomed his efforts to repair damage.
“When we first started, we had a story to tell,” Melia said. “That brand has been damaged to a point I hope is not irreparable. I know I can restore trust with the donors.”
Under Nardizzi, Wounded Warrior Project grew immensely, but it also became a lightning rod. Beneficiaries such as Saffron and others said the charity’s reach saved their lives. But others said their local offices left a lot of unkept promises and were exclusionary.
“They do a lot of good for a lot of people that need a lot of things, but I may not fit with what they are doing now,” said Shawn Lengeman, an Army sergeant and repeat combat veteran from Colorado Springs, who suffers from PTSD and severe anxiety and was medically retired in 2010. “I am not missing a limb, my (traumatic brain injury) isn’t to a point like you see on the commercials.”
Lengeman said he joined his local office hoping WWP would include him in some of the family support programs, but despite repeated attempts, he’s never been able to join in any of their events or programs.
“It just seems like as they get bigger and bigger, their priorities shift,” he said.
Scott Young said he felt a similar snub from his local office, which is based in North Carolina but includes his area. He said South Carolina vets were repeatedly excluded from outings and he had a negative experience when he tried to take advantage of their warriors back to work program. He said they offered him inappropriate jobs like working in McDonald’s and then tried to write him up in their newsletter when he found a job on his own.
Young still gets their emails.
“But I don’t even bother with them,” he said. “It’s just a waste of time. I am just another stat for them to write up.”
Also on Melia’s to-do list, if he is brought back to the charity, is identify how much money WWP has granted to partner charities and which ones. Melia said the organization was not fully transparent about where donor money was going. But charities such as The Elizabeth Dole Foundation and The Mission Continues praised WWP for its work and directors at both organizations said they were not concerned that their donor base would be affected.
“It’s not a pretty scenario for Wounded Warrior Project but I don’t think it spills over to other organizations in the veterans space ,” said Spencer Kympton, executive director at the Mission Continues. “Their goal is to empower as many wounded warriors as they can for as long as they can and I think they are making the tough decisions they need to make.“
Kympton said WWP staff who work with his organization seemed excited about the opportunities this might bring.
“I think they recognize there is an opportunity to do that in a new way or an evolved way and the folks I spoke to are excited about that,” he said.
Still, donors are watching carefully. A&W Restaurants, which has raised more than $550,000 for WWP since 2013 with its annual National Root Beer Float Day, said it too is encouraged by the actions WWP has taken since the allegations came to light. But a spokeswoman also acknowledged the company is paying close attention.
“We do not anticipate making a change in charity partners for our upcoming National Root Beer Float Day celebration on Aug. 6,” Sarah Blasi, A&W’s director of marketing, said in a statement to Stars and Stripes. “However, we are, of course, keeping a close eye on public sentiment following this situation.”
In the small world of veterans charities, everyone is watching — even organizations without direct ties to WWP.
“It’s something we take very seriously ,” said David Coker, president of the Fisher House Foundation. “Anytime there’s bad press about an organization you are of course concerned about how it may impact your operations.”
Melia and others have criticized Wounded Warrior Project for not being more explicit about why it chose to remove Nardizzi and Giordano.
But White, who wrote a book about donor intent, said it ultimately doesn’t matter whether the board believes Nardizzi took the organization in the wrong direction or simply needed to calm spiralling confidence in the brand. Something needed to be done.
“There’s no way to predict it, but if they don’t get out ahead of this ... in some real way, very quickly, they will lose donor support and it will be a death spiral,” White said. “It’s going to be hard. It’s going to take more than homilies to bring it back.”