When the Wounded Warrior scandal broke last month many Americans were shocked that one of the most successful and respected nonprofits in the country has been squandering donations on obscene luxuries and public relations. Unfortunately, the Wounded Warrior Foundation won’t suffer the repercussions alone.
The Wounded Warrior Project embraced an important mission that also happened to have spectacular donor appeal: helping transition in injured veterans back into civilian life and ensuring that they have access to services they deserve. So when CEO Steve Nardizzi complained that spending lavishly on “the brand” was necessary because it will help more veterans in the long run, one has to be skeptical. If anything, his strongly branded organization was taking money that donors would’ve otherwise given to similar but less famous nonprofits serving the same constituents. According to Great Nonprofits virtually all of them spend less on overhead than the Wounded Warrior Project’s 40%. So the public outrage was not, as Nardizzi’s comments suggest, a gut reaction based on a misunderstanding, but rather a very logical assessment of the Wounded Warrior scandal.
Forty percent of the Wounded Warrior Project’s immense income came to $124 million a year. Yes, an organization of that size carries heavy personnel costs, but putting employees up in 5-star hotels and flying them to conferences in business class shouldn’t be part of them. The fact that the Wounded Warrior scandal broke because past employees spoke out over their guilt of having expensed ridiculous and wasteful purchases with the money that not-too-rich donors were taking out of their piggy banks highlights the clash between perception and reality. It’s not illegal to make someone believe that they’re buying a person a prosthetic leg when they’re really buying a heck of a pyrotechnic show for a conference. It’s sneaky to place those tear-jerker ads but as long as the Wounded Warrior Project diligently reported their expenditures on their Form 990 – which they did – they stayed within the letter of the law.
So where’s the foul? The crux of the Wounded Warrior scandal is that people feel that they’ve been lied to and cheated. They feel that the organization toyed with their emotions and good intentions and then spent their donations selfishly and irresponsibly. Even if we pretend that Nardizzi’s statement about being able to do greater good by building the brand wasn’t an outright lie, one wonders why he’s hired a PR firm specializing in crisis management if he doesn’t see, on some level, that the Wounded Warrior Project peddled much less than the truth.
This cynical breaking of trust harms not just the Wounded Warrior Project itself but every nonprofit, and indeed every person in our society. Polls have already shown that more and more individuals are questioning nonprofits as an institution. Lists of nonprofit CEO salaries, some more accurate than others, are frenetically circulating online. Of course this threatens the ability of legitimate nonprofits, especially small ones, to continue to survive, but it also means that we have little trust in any institution anymore. Poll after poll confirms that people are unprecedentedly suspicious of big business, their government, and even religious leadership.
The public sector could’ve been a space for participation, solidarity, and action where democracy can weather these challenging times and perhaps take stronger root. It could’ve been a place where people can truly consider and act on what’s right, having no responsibility to do what’s most profitable, most politically expedient, or most in tune with religious texts. It could’ve been the nursery where we begin to create authentic solutions for our increasingly fractured and unequal society. Instead, thanks in great part to the Wounded Warrior scandal, it’s becoming just another sector we can mistrust and lose hope in.