The Wounded Warrior Project (WWP) is the largest veteran’s charity in the United

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The Wounded Warrior Project (WWP) is the largest veteran’s charity in the United States. John Melia, a Somalia-wounded Marine veteran initiated, [CT2] the WWP when he started giving backpacks to returning Iraq war veterans in 2003. The WWP incorporated on February 23, 2005, for “the purposes of providing vital programs and services to severely wounded service members and veterans to support their transition to civilian life as well-adjusted citizens, both physically and mentally.” Melia hired Steven Nardizzi as CEO. Under Nardizzi’s leadership, the organization experienced incredible financial growth, as total revenues (income) increased from $26.1 million in 2008 to $342 million in 2013. Assets (total value of everything they owned) reported on WWP’s IRS 990 forms grew from $36 million in 2010 to $269 million in 2014.

In 2014, the organization reported $189 million in program services expenses including $42 million in program grants to other nonprofit organizations. The WWP claimed it supported 398 veterans and their caregivers, assisted 302 veterans in gaining employment, and coordinated four-day cycling opportunities, known as Soldier Rides, for an additional 156 veterans. Examples of the grants included $1 million for recreational activities, $300,000 for a parade, $50,000 for a monument, and $25,000 one nonprofit used to lobby and negotiate for postal rates for nonprofit organizations. $5.7 million was spent by WWP to produce the highly-visible Soldier Rides.

Criticism emerged in 2014 from veterans’ advocates and veterans themselves, stating the WWP is more concerned with image and public relations impact than it is the long-term well-being of veterans. The Independent Voter Project stated that for an entity generating such huge revenues, “numbers like those seem curiously low”. Another question was “raised by just how some of the services that it (WWP) funded actually helped veterans recover from post-traumatic stress or rehabilitate from combat-related wounds.” In December 2015, the WWP’s National Alumni Director, Ryan Kules, described upcoming events for veterans across the United States to WWP staff members, which included family members receiving haircuts and spa services (Minnesota), 25 veterans and family members attending A Christmas Carol (Alaska), 35 veterans will spend an evening bowling (Colorado), 20 veterans participate in a holiday Lego club night (Hawaii), 100 veterans and guests attend a winter wonderland (California), and veterans attend a healthy holiday cooking class (Utah).

On March 9, 2016, after multiple news reports “highlighted lavish spending, including extravagant parties and events, and cited dozens of former staff members describing a toxic leadership culture at the popular veterans’ charity” the WWP board of directors terminated CEO Steve Nardizzi and Chief Operations Officer Al Giordano. Prior to the terminations, WWP vigorously defended itself against accusations of extravagant spending on staff conferences and events, spending too little on programs for veterans, and too much on fundraising. The board responded by issuing a statement claiming an independent audit found the organization spent 81% of donations on programming, but did not produce the audit for the public.

In May, 2016, U.S. Senator Charles Grassley (R-Iowa), chairman of the Senate Finance Committee, asked WWP to provide an account of spending not provided on IRS tax forms, including expenses for travel, meetings, public relations, lobbying, and the Charity Defense Council. The WWP is cooperating with Sen. Grassley’s request. The ongoing investigation found among other things that:

-> 33% of program services claimed by the WWP was free media and advertising.

-> The transfer of $37.1 million to the Wounded Warrior Long-Term Support Trust (a Delaware nonprofit whose total net assets went from $9.1m at the beginning of 2013, to $37.5 million at the end) does not name any board members on the Form 990.

-> 94% of program services to veterans in 2013 and 2014 consisted of tickets to sporting events.

-> In 2014, of the $242 [CT3] WWP spent on program expenses, approximately $150 million was not devoted to veterans and a large portion of it was in-kind donations.

Answer the following in reference to the WWP case:

A) In this case, where did “fault” lie - with the staff, CEO, Board, funders, other individuals, with simple practices and procedures, or was it embedded in the very structure and set-up of the organization as a whole? Why?

B) What kind of dishonesty was present -- embezzlement, theft, diversion, nepotism, partiality, abuse of trust, lying, self-serving misspending, closed-eyes oversight, or just plain incompetence? Explain in terms of fiduciary responsibility.

C) At what stage in the story might intervention have saved things? Who should have caught things first?

D) Who or which group was ultimately responsible?

E) Who had the responsibility to see it didn’t happen again, and was that fulfilled?

F) What other kinds of nonprofit organizations might be liable to suffer similar problems to those identified here?

Explanation / Answer

1. In this case, the fault was embedded in the very structure. Everyone in the organisaion was taking advantage and misused fund. The purpose of providing various programmes and services was to find employment, to return in a normal life etc. But the organisation was more concerned with it's image and public relation rather than the betterment of veterans as claimed by the veteran themselves. It included highly lavish parties, events etc.

2. Fiduciary refers to highest standard of care. In this case, The organisation is a fiduciary and the veterans were beneficiaries. The kind of dishonesty present were abuse of trust, misspending and diversion from the goal. The money was for the betterment of life of veterans and not for enjoying lavishness. The company diverted from its goal, abused the trust of veterans and funders and did a lot of mismanagement with the money.

3. When In 2014 the company reported of spending $189 million for various program, then several veteran reported against the organisation. At that time , If veterans and independent voters interviened properly, that could have saved things. Internal auditors should have caught things first.

4. The veterans were ultimately responsible Because this whole organisation and and various programme was offered to them. If they asked for the audit report or if they had raised the issue, then it was not possible for the organisation to misuse funds at this extent. Rather they were just enjoying that lavishness at that time.

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