Wounded Warrior Project CEO expects layoffs during restructuring
By DAN LAMOTHE | The Washington Post | Published: August 5, 2016
The new chief executive of the Wounded Warrior Project, one of the nation's largest veterans charities, said he anticipates laying off an undisclosed number of employees and cutting the amount of financing it provides smaller veterans groups amid a restructuring that follows scrutiny of the nonprofit organization's spending.
Retired Army Lt. Gen. Michael Linnington, who took over Wounded Warrior Project in July, said he is in the middle of an assessment that includes meeting with wounded warriors, donors and officials from other groups that help veterans. Details of the restructuring will be announced in September, but employees already know that some jobs will be cut and the salaries of some senior officials will be reduced, he said. There are currently about 600 employees, with headquarters in Jacksonville, Florida, and offices in other cities.
"We have a long road ahead of us, and the mission is huge, and it's going to continue to grow," Linnington said. "We have to be as nimble and as transparent and as responsive as we can possibly be."
Linnington, a 35-year Army veteran who served in both Iraq and Afghanistan, was hired in June following a nationwide search. He replaces former chief executive Steven Nardizzi and chief operating officer Al Giordano, who were let go by the organization in March under a cloud after investigative reports by both the New York Times and CBS News raised questions about their spending.
Former Wounded Warrior Project employees raised questions in those reports about five-star hotel accommodations the nonprofit organization used and how much money it spent to expand its own clout. Wounded Warrior Project officials protested the depiction at the time, but Sen. Charles Grassley, R-Iowa, the chairman of the Senate Judiciary Committee, was among those who pressed them afterward for information.
Linnington said aspects of media coverage this year have been exaggerated, especially accusations that Wounded Warrior Project does not reach out to help veterans and spent $3 million on an "all-hands" meeting in which 500 employees gathered in Colorado in 2014. The nonprofit group makes tens of thousands of calls to veterans each year, Linnington said, and the amount spent on the conference in question was less than $1 million.
But the retired general sounded a note of awareness about how the conference in Colorado looked from the outside. Wounded Warrior Project no longer holds events like that and already has increased the scrutiny and controls it has on spending for travel, he said.
Linnington also was hired at a salary of $280,000, he said. That's significantly smaller than the $473,015 and $369,030 that Nardizzi and Giordano, respectively, received in 2013, the last year for which tax documents are readily available. At least 12 employees made at least $147,000 at the time.
"I have a much different salary than my predecessors had, and I think that's appropriate," Linnington said. "We're looking at all of the salaries of all of our executives now, and I think that you will see them all trend down, as well. That's part of trying to squeeze every nickel out of every donor dollar and to get it where it's most needed: with those who served."
Nardizzi said Friday that he wishes Linnington well and called it a "great blessing" to help wounded warriors while running the organization. But he criticized its board of directors for agreeing with his decisions behind the scenes for years and then changing their minds more recently about how Wounded Warrior Project should be run. Based on his projections, they will make about $200 million this year - half of what they brought in last year, he said.
The transition follows an intense period of growth for Wounded Warrior Project, which was established in 2003 in the basement of Marine Corps veteran John Melia in Roanoke. It grew rapidly after Nardizzi took over in 2009, taking in about $40.9 million in revenue that year but $342.1 million by 2013. Nardizzi said they made about $18 million the year before he took over.
Watchdogs tracking charities, however, have said that Wounded Warrior Project spent an unusually high amount soliciting donations. The website Charity Navigator gave it an overall rating of 82 on a 100-point scale, but said the group used only 58.8 percent of its money on programs and services and 35 percent to raise more money. Wounded Warrior Project has disputed that, saying about 80 percent of its money goes to programs and services.
Linnington said that his assessment will examine how the Wounded Warrior Project spends all of its money and what programs it should drop or reduce. But he cautioned that he believes there is a "misperception out there that Charity Navigator percentages are what every nonprofit should drive for."
The difference, he said: Wounded Warrior Project invests heavily in fundraising in part because of the scope of services it provides to wounded veterans and their families.
"There's a certain amount of investment that needs to take place to maintain our facilities and do our advertising and do certain things that preclude us from getting to a very high percentage of donated dollars to warriors," he said.
Linnington and other Wounded Warrior Project officials are expected to meet Aug. 10 with staff members for Grassley, said Jill Gerber, a spokeswoman for the senator. He remains concerned about how much of the nonprofit organization's money is spent on veterans services.