Who wouldn’t sympathize with, and want to help, paralyzed American veterans?
A glossy, multi-colored letter and pamphlet came in the mail the other day from the Salem-based Oregon Chapter of Paralyzed Veterans of America (PVA). The principal message was a plea for me to be a sponsor or buy tickets to a May 14, 2016 gala and auction in Wilsonville.
Like so many other pleas to help our veterans, it sounds good…until you look behind the curtain at the non-profit’s finances.
The national PVA organization is among the top charities that collect the bulk of public contributions to veterans’ causes.
But according to the Center for Public Integrity, The national headquarters of Paralyzed Veterans of America (PVA) has a long history of high fundraising expenses and low program expenses that actually help disabled veterans.
The Better Business Bureau’s (BBB) Giving Alliance says the PVA doesn’t meet its standards, principally because the BBB is unable to verify that the PVA spends at least 65 percent of its total expenses on program activities and no more than 35 percent of related contributions on fund raising. Related contributions include donations, legacies, and other gifts received as a result of fund raising efforts.
The BBB reviewed PVA’s 2014 audit report for fiscal year 2014 and concluded that it didn’t provide an accurate presentation of PVA’s fund raising and program service expenses.
According to the audited financial statement, PVA incurred joint costs of $58,587,922 for informational materials and activities that include fund raising expenses in 2014. Of this, PVA allocated $32,132,043 to program service expenses and $24,945,288 (21%) to fund raising expenses. The BBB disagreed with PVA’s decision to count $32,132,043 of direct mail appeals to the program service category, arguing that most of that expense should be considered fundraising.
If all the proper spending was allocated to fundraising, the PVA actually spent $57,077,331 on fundraising in 2014, or 39 percent of its expenses. Add what it spent on administrative expenses, and 42 percent of its budget went to non-program expenses, a monstrously high level.
The PVA’s financial records also show an dismal performance at the state level in Oregon. According to information the Oregon chapter submitted to the IRS, in its fiscal year ending Sept. 30, 2014, the Oregon Chapter’s expenses totaled $628,567.
The chapter reported spending just $139,868 on professional fundraising services, but it spent another $62,863 on “Public Awareness” and $6550 on “advertising and promotion”. That adds up to $209,281 focused on fundraising, or 33 percent of total spending.
Look even closer and you find that the Oregon Chapter spent just $92,164, 15 percent of its total spending, on grants and other assistance to individuals in the U.S. and on benefits to or for members in 2014. Almost all the rest went to fundraising, salaries, benefits, payroll taxes, legal expenses, accounting, office expenses, travel, insurance, depreciation, and contract services.
“The scoundrels and the thieves and the rip-off artists … that want to make a lot of money know that these are categories of charities where the American public is gravitated, it pulls at the heartstrings and they know that the tendency of Americans is to give impulsively, emotionally with that pull,” Ken Berger, president and chief executive officer of Charity Navigator, an independent charity evaluator, told the Center for Public Integrity. “They exploit that and they use that.”