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Wounded Warrior Project spends 58% of donations on veterans programs

Published Aug. 5, 2013

Editor's note: As part of a yearlong investigation into charities across the nation, the Tampa Bay Times and its reporting partner, the Center for Investigative Reporting, asked readers in June to suggest nonprofits for closer review. Readers responded with nearly 300 suggestions. In the coming months, the Times and CIR will examine some of those charities and share what we found.

Wounded Warrior Project, created in 2003, has become one of the fastest-growing veterans' charities in the country.

It was also one of the most requested when the Tampa Bay Times and the Center for Investigative Reporting asked readers to suggest charities to investigate.

Readers wanted to know how Wounded Warrior was using its donations and whether the charity was spending a large portion of those donations to hire for-profit corporations to raise money.

To find out, reporters examined four years of tax filings and reviewed thousands of actions by charity regulators across the nation to determine if the charity had violated laws governing charity operations.

Unlike the 50 worst charities the Times and CIR named on its list of America's worst, Wounded Warrior does not rely heavily on for-profit solicitation companies to raise money. And it does not pay telemarketers to drum up donations.

Instead, it uses a combination of fundraising events, corporate sponsorships, advertising and direct mail appeals.

Last year, the charity raised nearly $150 million.

About $81 million was raised through professional solicitors. Wounded Warrior paid 11 percent of that money to cover its solicitors' fees and the expense of the solicitor-run campaigns. In comparison, veterans charities on the Times/CIR list paid an average of 82 percent to their solicitors.

Wounded Warrior Project spends most of the money it raises counseling veterans and running sports and educational programs.

Last year, it also gave nearly $5 million to other charities, including the American Red Cross and Resounding Joy, a music therapy group in California.

Wounded Warrior also gave about $880,000 to nearly 100 veterans in the form of college scholarships and stipends for its year-long Track Program, which helps veterans transition to college and the workplace.

In its 2012 IRS filing, Wounded Warrior reported that about 73 percent of its expenses went toward programs. But the charity is one of many that use a commonly accepted practice to claim a portion of fundraising expenses as charitable works. By including educational material in solicitations, charities can classify some of the expense as good deeds.

Ignoring these joint costs reduces the amount Wounded Warrior spent on programs last year to 58 percent of total expenditures.

The charity has been criticized for its salaries, with 10 employees earning $150,000 or more. Chief executive Steve Nardizzi, whose total compensation was about $330,000 last year, said salaries are in line with similarly sized organizations.

"We're a direct service provider, dealing with some of the world's greatest social ills," Nardizzi said, referring to the charity's more than 250 employees who provide services to veterans. "We hire the best of the best and we pay them a living wage."

While the Times and CIR found no actions against the charity by regulators, Wounded Warrior has gotten mixed reviews from independent charity watchdogs. The charity meets all 20 standards set by the Better Business Bureau's Wise Giving Alliance but only gets three of four stars from Charity Navigator.

Charity Watch gave Wounded Warrior a "C+" grade, up from a "D" two years ago, based on the amounts spent on programs and fundraising.

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