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Kickin' Ass and Takin' Names
Guest
Study Faults Charities for Veterans
Some Nonprofits Shortchange Troops, Watchdog Group Says
By Philip Rucker
Washington Post Staff Writer
Thursday, December 13, 2007; A01
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
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. But the institute'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.
"They know how to work the system, and they seem pretty good at not
going over the line, although it is pretty outrageous that so little
money is actually winding up benefiting charities," said Daniel
Borochoff, president and founder of the Chicago-based institute.
The charities' practices have sparked outrage among some members of
Congress.
The House Committee on Oversight and Government Reform was scheduled
to hold its first hearing on veterans charities this morning.
"People want to help the veterans," said Rep. Chris Van Hollen (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."
Richard H. Esau Jr., executive director of the Military Order of the
Purple Heart Service Foundation, based in Annandale, said the cost of
fundraising limits how much his group can spend on charitable causes.
"Do you have any idea how much money it costs to advertise? It's
unbelievable the amount of money it takes to advertise in the print
and electronic media," he said. "I'm very proud of what we do, and we
certainly do look after everybody. F or no F, the point is we do the
right thing by veterans."
Borochoff said many veterans charities are "woefully inefficient,"
spending large sums on costly direct-mail advertising.
"They oversolicit. 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 today.
The philanthropy institute 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 percent of its income to charitable causes.
One group received an A, and one received an A-minus.
Jim Weiskopf, spokesman for Fisher House, said the charity does not
use direct-mail advertising. "As soon as you do direct mail, your
fundraising expenses go up astronomically," he said.
One egregious example, Borochoff said, is Help Hospitalized Veterans,
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 Hospitalized Veterans 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
Internal Revenue Service. His wife, Elizabeth, 73, received $113,623
in salary and benefits as "newsletter editor," the Post's review of
the tax filing showed.
Chapin and other leaders of Help Hospitalized Veterans did not return
calls for comment. But the charity e-mailed a statement stating that
it is among "the finest veterans' charities this nation has to offer."
The statement also said its "fundraising expenses, accounting methods,
and executive salaries are comparable to other nonprofits in this
field."
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 percent
of total contributions.
Weiner, who is scheduled to testify before the House committee today,
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.
"In the rush to help, there's a lot of innovative work and good work
happening, but there's also a lot of fraud and waste," said Paul
Rieckhoff, executive director of Iraq and Afghanistan Veterans of
America. "There's never been a greater need for veterans charities in
a generation, and I hope issues like this don't deter people from
giving."
Sen. Charles E. Grassley (R-Iowa), one of Congress's leading critics
of charities, said some of the groups are abusing their tax-exempt
status.
"Taxpayers are subsidizing that tax exemption," Grassley said through
a spokeswoman. "Sitting on donors' money or spending too much on
contracts and salaries doesn't benefit the public."
Rep. John Sarbanes (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.
http://www.washingtonpost.com/wp-dyn/content/article/2007/12/12/AR2007121202657.html?hpid=topnews
Some Nonprofits Shortchange Troops, Watchdog Group Says
By Philip Rucker
Washington Post Staff Writer
Thursday, December 13, 2007; A01
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
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. But the institute'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.
"They know how to work the system, and they seem pretty good at not
going over the line, although it is pretty outrageous that so little
money is actually winding up benefiting charities," said Daniel
Borochoff, president and founder of the Chicago-based institute.
The charities' practices have sparked outrage among some members of
Congress.
The House Committee on Oversight and Government Reform was scheduled
to hold its first hearing on veterans charities this morning.
"People want to help the veterans," said Rep. Chris Van Hollen (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."
Richard H. Esau Jr., executive director of the Military Order of the
Purple Heart Service Foundation, based in Annandale, said the cost of
fundraising limits how much his group can spend on charitable causes.
"Do you have any idea how much money it costs to advertise? It's
unbelievable the amount of money it takes to advertise in the print
and electronic media," he said. "I'm very proud of what we do, and we
certainly do look after everybody. F or no F, the point is we do the
right thing by veterans."
Borochoff said many veterans charities are "woefully inefficient,"
spending large sums on costly direct-mail advertising.
"They oversolicit. 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 today.
The philanthropy institute 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 percent of its income to charitable causes.
One group received an A, and one received an A-minus.
Jim Weiskopf, spokesman for Fisher House, said the charity does not
use direct-mail advertising. "As soon as you do direct mail, your
fundraising expenses go up astronomically," he said.
One egregious example, Borochoff said, is Help Hospitalized Veterans,
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 Hospitalized Veterans 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
Internal Revenue Service. His wife, Elizabeth, 73, received $113,623
in salary and benefits as "newsletter editor," the Post's review of
the tax filing showed.
Chapin and other leaders of Help Hospitalized Veterans did not return
calls for comment. But the charity e-mailed a statement stating that
it is among "the finest veterans' charities this nation has to offer."
The statement also said its "fundraising expenses, accounting methods,
and executive salaries are comparable to other nonprofits in this
field."
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 percent
of total contributions.
Weiner, who is scheduled to testify before the House committee today,
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.
"In the rush to help, there's a lot of innovative work and good work
happening, but there's also a lot of fraud and waste," said Paul
Rieckhoff, executive director of Iraq and Afghanistan Veterans of
America. "There's never been a greater need for veterans charities in
a generation, and I hope issues like this don't deter people from
giving."
Sen. Charles E. Grassley (R-Iowa), one of Congress's leading critics
of charities, said some of the groups are abusing their tax-exempt
status.
"Taxpayers are subsidizing that tax exemption," Grassley said through
a spokeswoman. "Sitting on donors' money or spending too much on
contracts and salaries doesn't benefit the public."
Rep. John Sarbanes (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.
http://www.washingtonpost.com/wp-dyn/content/article/2007/12/12/AR2007121202657.html?hpid=topnews
