JACKSONVILLE, Fla. – The board of Wounded Warrior Project, which grew from a shoestring charity providing goodie bags to hospitalized soldiers to become a fundraising phenomenon that took in $372 million last year, has fired its top two executives, aiming “to help restore trust in the organization.”
Chief executive officer Steve Nardizzi and chief operating officer Al Giordano are out as the board cracks down on employee expenses and strengthens controls that have not kept pace with the group’s rapid growth, according to a statement released late Thursday by a public relations firm specializing in crisis management.
The Wounded Warrior Project’s directors hired outside legal counsel and forensic accounting consultants to conduct an independent review of the Jacksonville-based organization’s records and interview current and former employees after CBS News and The New York Times reported in January about allegedly wasteful spending within the charity.
WATCH: Wounded Warriors charity embroiled in scandal
According to those reports, Wounded Warrior Project spends 40 to 50 per cent of its money on overhead – including extravagant parties and last-minute, business-class air travel – while other veterans charities spend as little as 10 to 15 per cent. Former employees accused the organization of profiting off the veterans; one said the project’s spending is equivalent to “what the military calls fraud, waste and abuse.”
A widely cited example was the group’s 2014 staff meeting in Colorado, where Nardizzi rappelled from the tower of a 5-star hotel into a crowd of employees. The public relations firm, Abernathy MacGregor, said the meeting cost about $970,000, and “such events will be curtailed in the future.”
Get daily National news
The firm also pushed back against the criticism, saying the group’s most recent audited financial statement shows 80.6 per cent of donations were spent on “programming,” not fundraising. The statement didn’t provide details, but cited a “joint allocation” accounting rule that enables non-profits to classify fundraising as a service to clients as long as the event or material also is “educational” and includes a “call to action” beyond simply appealing for donations.
Invoking that rule, the non-profit reported to the Internal Revenue Service that about 94 per cent of the $26 million spent on conferences and events between October 1, 2013 and September 30, 2014, “was associated with program services delivered to Wounded Warriors and their families,” the statement said.
To move forward with the changes, the board decided to remove Nardizzi and Giordano and create an Office of the CEO to oversee the non-profit on an interim basis, led by board chairman Anthony Odierno.
“It is now time to put the organization’s focus directly back on the men and women who have so bravely fought for our country and who need our support,” Odierno said in the statement.
Comments
Want to discuss? Please read our Commenting Policy first.