Our Nation's Veterans Deserve Better from America's Charities

Here are excerpts from Daniel Borochoff (President, American Institute of Philanthropy) testimony before the House Committee on Oversight and Government Reform Hearing on Veterans Charities (December 13, 2007) and a summary of AIP findings.

You can view entire report at the American Institute for Philanthropy website.

The American Institute of Philanthropy (AIP), a leading charity watchdog and information resource dedicated to helping its members and the general public make wise giving decisions, issued a report card this month for 29 veterans and military charities. Letter grades were based largely on the charities' fundraising costs and the percentage of money raised that was spent on charitable activities. Since 1993 AIP has been "America's toughest and most independent watchdog of the accountability, finances, governance and promotional practices of charities". The charities and grades assigned are listed below:

Air Force Aid Society (A+)
Army Emergency Relief (A+)
Armed Services YMCA of the USA (A-)
Fisher House Foundation (A+)
Intrepid Fallen Heroes Fund (A+)
National Military Family Association (A)
Navy-Marine Corps Relief Society (A+)

USO (United Service Organization) (C+)
Veterans of Foreign Wars and foundation (C-)

Blinded Veterans Association (D)
Disabled American Veterans (D)
National Vietnam Veterans Committee (D)
Soldiers' Angels (D)
United Spinal Association's Wounded Warrior Project (D)
Veterans of the Vietnam War & the Veterans Coalition (D)
Vietnam Veterans Memorial Fund (D)
World War II Veterans Committee (D)

American Ex-Prisoners of War Service Foundation (F)
American Veterans Coalition (F)
American Veterans Relief Foundation (F)
AMVETS National Service Foundation (F)
Disabled Veterans Association (F)
Freedom Alliance (F)
Help Hospitalized Veterans/Coalition to Salute America's Heroes (F)
Military Order of the Purple Heart Service Foundation (F)
National Veterans Services Fund (F)
NCOA National Defense Foundation (F)
Paralyzed Veterans of America (F)
VietNow National Headquarters (F)

Overall Conclusion

"AIP strongly believes that our brave veterans, as well as the intentions of donors who sincerely want to help them, are being dishonored by poorly rated veterans charities. Too little of America's donated dollars given in the name of veterans are actually benefiting veterans. AIP encourages the public to support accountable veterans charities that raise money efficiently and spend a high percentage of their budget on bona-fide charitable programs that substantially assist veterans. We would also like to see Congress, the IRS and the states create and enforce rules that motivate veterans groups and other charities to better fulfill their important missions."

Other AIP Findings"

  1. AIP believes that a charity should spend at least 60 percent of its cash budget on bona- fide charitable programs (35 percent or less receives an F and 75 percent or more receive an A), should spend less than $35 to raise $100 ($60 or more receives an F and $15 or less receives an A) and should not maintain over three years of available assets in reserves (over five years receives an F).
  2. 78 percent of the 500 charities that AIP rates receive a C or higher grade and spend at least 60% of their cash budgets on their published purpose.
  3. (While) many veterans and military charities do a lot of good... too many veterans charities choose to spend most of their donated dollars on direct mail and telemarketing solicitations, executive salaries, and other overhead expenses that do not directly benefit veterans.
  4. Total U.S. giving (now at about $300 billion a year) is a fixed pie. It has been 2 percent of GDP (Gross Domestic Product) for over four decades. Therefore, contributions wasted by a poorly performing charity is money that is not available to a charity that could use most of it to help a wounded veteran or other worthy recipient
  5. AIP strongly believes that most charities raising money for a highly popular cause such as injured veterans, firefighters, police, disaster relief, hungry or ill children, cancer, etc... should maintain reasonable annual fundraising costs of 35% or less. Exceptions would be made for groups that have been in existence for less than 3 years or with gross revenues of $500,000 or less.
  6. Many people are outraged to learn that under an accounting rule called AICPA SOP 98-2, charities are allowed to report large portions of solicitation costs as program service expenses
  7. In-kind items are difficult to value and distort the calculation of how efficiently a charity is spending your dollars. Charity financial statements often disclose the amount of donated items that are collected and distributed. However, they do not always tell you how useful these items are to the final recipient
  8. Another practice that is keeping veterans from being helped is the policy of some charities to hoard money that is desperately needed now by veterans, particularly the estimated 200,000 homeless veterans, which account for one-third of the adult homeless population.
  9. In order to reduce public confusion, AIP believes charities that wish to promote their Congressional charter status should be required to state that this status does not imply endorsement, approval or recommendation by Congress.

Oher News

Visit the Iraq & Afghanistan Veterans of America website.