Did the Wounded Warrior Project waste donors' money?

A new report alleges that the Wounded Warrior Project used only 60 percent of its operational budget for veterans services while spending excessively on parties, fundraising, and employee accommodations.

Andy Newman/Florida Keys News Bureau via AP/File
Flag wavers greet wounded soldiers traversing the Florida Keys Overseas Highway in Marathon, Fla. earlier this month during Soldier Ride, staged by the Wounded Warrior Project to help restore injured soldiers' physical and emotional well-beings.

The Wounded Warrior Project (WWP), a veterans services charity, is being accused of spending too much donation money on itself through lavish employee accommodations, lobbying efforts, and overhead expenses.

WWP was founded in 2003 to support veterans who sustained a “physical or mental injury, illness, or wound” any time after the Sept. 11, 2001 terrorist attacks. Since its inception, the project has grown nationally and is one of the prominent Veterans Service Organizations officially chartered and recognized by Congress, with tens of thousands of members.

The charity has drawn some criticism in recent years, however, for a variety of practices relating to its spending and treatment of its donors. Last year, The Daily Beast noted that WWP spent tens of thousands of dollars in court and threatened other charities over their use of similar logos or names. And in a separate report, the Beast criticized WWP’s payment of its employees – the group's top 10 salaries totaled around $2.6 million – as well as its selling donor information to outside parties.

Now, a new CBS News investigation is calling into question the practices relating to the charity’s operational costs and employee spending. Over the past several years, WWP’s fundraising has grown rapidly, with the group taking in more than $342 million in 2014, according to Charity Navigator. Of that total revenue around $248 million was spent on functional expenses, where more than $99 million went towards overhead, administrative, and fundraising costs while around $148 million went to veterans’ services and programs.

Charity Navigator also reports that WWP's executive director, Steven Nardizzi, made $473,000 in 2014.

William Chick, a former WWP supervisor who was fired in 2012, told The New York Times that the charity has come to have "less focus on veterans and more on raising money and protecting the organization."

Connie Chapman, who supervised a WWP office for two years, said to the Times that "People could spend money on the most ridiculous thing and no one batted an eye."

Charities regularly use donated money for fundraising and operations, but WWP’s spending of 40 percent of its functional budget on those types of expenses is uncommon. Several similar veterans services charities tracked by Charity Navigator all used less than a quarter of their expenditures on raising funds and administration costs.

"Their mission is to honor and empower wounded warriors, but what the public doesn't see is how they spend their money," Army Staff Sgt. Erick Millette said of WWP, per CBS News. Millette is a veteran of Iraq who returned home in 2006 after suffering a brain injury alongside posttraumatic stress disorder. He went on to participate in WWP programming and spoke for the group for several years before quitting.

Millette and other former WWP employees have detailed the events, lavish accommodations, and gifts that the charity spent its money on, rather than for veterans services. One example was a WWP staff retreat at a luxury resort in Colorado in 2014. Five hundred WWP employees attended, and the total cost of the four-day event was about $3 million, according to CBS.

"Donors don't want you to have a $2,500 bar tab. Donors don't want you to fly every staff member once a year to some five-star resort and whoop it up and call it team building," Millette said.

WWP's Director of Alumni, Captain Ryan Kules, denied the reported $3 million price tag for the 2014 event, and said that the group's spending on conferences is not excessive.

"It's the best use of donor dollars to ensure we are providing programs and services to our warriors and families at the highest quality," he said to CBS.

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