‘Tis the season to be jolly and the season when organizations ask for donations that they say will help veterans. The nonprofit world can be downright nasty and competitive. So where to put your hard-earned dollars? Sadly, there are organizations that spend a large percentage of the funds collected for veterans and service members on fundraising, salaries, and administrative costs.
One such solicitation landed in my mailbox earlier this year from the National Veterans Services Fund (NVSF) based in Darien, Connecticut. It presented a poignant reminder about the “thousands of disabled veterans who served in Iraq, Afghanistan, Vietnam, and Korea”:
“Many of these vets literally gave their arms and their legs in battle to preserve your freedom, your prosperity, and your family’s future.”
In the next paragraph, it asks to send “your gift of $10 or more to our 2015 Annual Fund Campaign. Your $10 gift will mean so much to a disabled veteran.”
That solicitation came on a neat form letter, with an NVSF Washington, D.C. address. And, since I live in Oceanside, California, this “Annual Fund Drive voluntary reply form” had listed in its return address “2015 Oceanside Area Annual Fund Drive” with the NVSF Washington, D.C., P.O. box.
The envelope came complete with nonprofit stamps to coverage postage charges, and with this additional solicitation on the back: “P.S. Just $5 or even $3 will help a lot! Won’t you please send just $5 now to help in our efforts to help our disabled military veterans?”
It is a slick marketing program produced by Direct Response Consulting Services marketing company, and it was signed by Phil Kraft, listed as the NVSF “program director” in this annual drive. It didn’t mention that Phil Kraft is also the president and treasurer of the NVSF.
Since 2009, I have worked and volunteered at nonprofits that take pride in the fact that more than 90 percent of every dollar collected goes to services for veterans and social service programs in north San Diego County, with the remaining 10 percent or less going to salaries and costs.
What I find distasteful about NVSF is that on the solicitation’s front page, there is no explanation for why more than 66 percent of every dollar collected by their organization goes to solicitation costs, and more than 12 percent goes to administration costs—together, accounting for 78 percent of every dollar collected.
Interestingly, on the back side in red ink are more details that I don’t know how many people will read. Dubbed “NVSF facts,” the form reports that Direct Response Consulting Services is the paid professional fundraiser “used to professionally assist them in this solicitation of funds.”
In the hard-to-read red print, it read,
“In the last fiscal year, NVSF raised a total of $8,480,650. Its expense distribution was 66.14 percent to fundraising, 12.28 percent to administration, 14.75 percent to program services, and 6.83 percent to public education in conjunction with fundraising appeals. The cost of this solicitation is charged partly to fundraising and partly to public education. Fundraising costs include costs incurred in establishing a donor base. Public education costs include costs incurred in disseminating information contained in solicitations.”
The final insult: NVSF said in that back-page statement, “Your name may be made available to other organizations.”
The national charity watchdog Charity Watch gives NVSF a F grade while noting that 91 percent of funds collected go to overhead and only nine percent goes to assistance programs. The Charity Watch program percentage is based on the cash budget an organization spends on programs relative to overhead that covers fundraising, management, and general expenses.
NVSF isn’t the only national veteran-related organization that receives horrible grades from Charity Watch. The following have all received F grades:
- The Military Order of The Purple Heart Service Foundation
- The VFW
- The Vietnam Veterans of America
- Paralyzed Veterans of America
- Veterans Support Organization
The American Legion National Headquarters received a D grade from Charity Watch.
“Any nonprofit that is giving back 90 percent of funds collected for fundraising and administration is absurd,” said Ann Mills-Griffiths, chairman of the board of directors for the 45-year-old National League of POW/MIA Families. “Paying huge fees to companies to solicit funds is, in my opinion, a violation of public trust. I don’t do telephone solicitations. We could use more help here to raise awareness about our issues, but I’m not going to suggest to our board that we hire a fundraiser. No way.”
In December 2014, an investigative report published by the Tampa Bay Times and the Center for Investigative Reporting listed NVSF as number eight in the 48 “Worst Charities, Ranked by Money Blown on Soliciting Costs,” based on tax filings from the previous 10 years of returns filed with the federal government.
We’re not talking small potatoes.
According to the report, NVSF solicitors raised $70.2 million over a decade and paid $36.9 million to solicitors alone, spending 7.8 percent “on direct cash aid.” Over 10 years, the 48 organizations listed in the report paid $935.6 million cash to solicitors, $348.2 million in cash to charities, while $43.9 million when to direct cash aid. Watchdog groups say no more than 35 percent of donations should go to fundraising costs.
Sadly, there is no standard for how much should be spent on direct cash aid.
Other organizations listed in that group of 48 include:
- The Cancer Fund of America—solicitors raised $86.8 million and spent $75.4 million on solicitors.
- The Children’s Wish Foundation International—solicitors raised $92.7 million and spent $61.2 million on solicitors.
- The Firefighters Charitable Foundation—solicitors raised $62.8 million, with $53.8 million spent on solicitors.
Three organizations that received A+ ratings from Charity Watch were:
Additionally, “The number of new veteran charities has increased relatively rapidly over the past five years or so, growing by 41 percent since 2008,” Charity Watch stated. Last year, more than 3.8 million war veterans were receiving disability compensation from the U.S. Department of Veterans Affairs out of over 21.6 million veterans in 2014, according to the National Center for Veterans Analysis and Statistics.
A word of advice before making any donation to help veterans: Go to Charity Watch to see if they are reviewed and use common sense. Check into local organizations. Nationally, according to Charity Watch, there are more than 40,000 nonprofit organizations dedicated to serving the military and veterans and an estimated 400,000 service organizations that in some way touch veterans or service members.
(Featured image courtesy of U.S. Air Force/Senior Airman Hailey Haux)