OPINION:
It’s impossible to repay the debt Americans owe to our military veterans. And many Americans make their gratitude known by donating to veteran charities, especially on Veterans Day.
But few Americans realize that some of the biggest veterans charities in the country are overpromising and under-delivering for our veterans. Instead of stretching every dollar to its fullest potential, hundreds of millions of dollars are wasted each year by inefficient and ineffective organizations. We can do better.
In 2019, the Disabled Veterans National Foundation spent over 90% of its $27 million budget on overhead expenses. Mutts with a Mission, a group that claims to provide veterans with service dogs, similarly spent 94% of its $3.5 million budget on overhead rather than veterans programs.
Help Heal Veterans, which was formerly known as Help Hospitalized Veterans, told donors their money would be used to provide therapy to veterans. Instead, in 2012, the group’s executives gave veterans paper airplane kits and used the rest of the money to fund their lifestyle. The $80,000 the organization spent golfing during an annual board meeting could have really made a difference for veterans in need.
Those are admittedly extreme examples of mismanagement. But hundreds of millions are donated to inefficient veterans charities every year. Do most do some good? Sure. But at a huge expense for the veterans in need or the donors who want to make a difference.
Some of the most wasteful charities are the most well-known because they’re willing to buy primetime commercials or fill mailboxes with sleek fliers calling for donations. These charities are willing to exploit American patriotism even if it means they spend more money on fundraising than they do on the veterans featured in the commercials.
Beyond the bad apples, there are vet charities that keep their overhead expenses below 15%. These groups often go unnoticed because they’d rather spend every penny helping a veteran rather than boasting about their own work in an advertisement. They don’t use questionable accounting practices to obscure their spending. And they don’t squirrel away a decade’s worth of donations instead of spending them on veterans in need today.
One barrier to an improved philanthropic landscape is the current rating systems that fail to properly inform donors. Some have even been accused of pay-for-play.
The BBB’s philanthropic arm, the Wise Giving Alliance, similarly raked in more than $1.8 million in licensing fees from organizations that paid to display its seal of approval according to its most recent tax filing. Some of the organizations that have received the Wise Giving Alliances’ approval have far from efficient practices, but donors may see the seal of approval and think the organization earned that recognition.
The Wise Giving Alliance and the BBB maintain that payments are not considered in the approval process, but donors deserve to know about the financial incentives at play. After all, the Better Business Bureau has been caught giving “A” grades to phony businesses that paid to display the BBB seal on their websites, including a hoax group claiming to be the terrorist organization Hamas and a fake white supremacy website called “Aryn Whiting.”
Others rank charities on issues that most donors don’t value. Guidestar, also known as Candid, rates charities based on transparency, for example. A group could waste millions of dollars on overhead and still receive good marks because they have easily accessible tax records.
Some review platforms also lock their information behind paywalls. A fixed-budget donor planning to chip in $10 to a veterans charity isn’t going to pay $75 for an annual subscription to confirm that his or her donation will be spent wisely.
To help donors find high-efficiency groups, the RAM Veterans Foundation has published a new report highlighting 23 of the nation’s most efficient veterans charities. These “Top Gun” charities met strict standards by keeping their overhead expenses to a minimum and delivering results for veterans in need. They have a proven track record of helping veterans and their families in many different ways including housing support, career counseling, therapy, service animals, and scholarships (see the “Highly Recommended” groups at www.charitiesforvets.org).
This year, money will be tight for many Americans. More veterans will find themselves in need of financial assistance and fewer Americans will have the means to donate. So, this Veterans Day, make sure you thank a vet for their service, but also spend the time to determine the best place to send your donations. An informed choice may be the best thanks you can give.
• Richard Berman is President of Berman and Co in Washington, and a RAM Veterans Foundation board member.
Please read our comment policy before commenting.