Americans who want to make charitable donations to U.S. veterans are wondering where to send their money this holiday season after it was discovered that inefficient management practices kept millions of dollars from the troops.
The House Committee on Oversight and Government Reform held a hearing Thursday on veterans charities after the nonprofit watchdog group the American Institute of Philanthropy gave failing grades to 10 of 27 veterans charities it reviewed.
One of the biggest charities listed in the report was The American Veterans Relief Foundation, which spent about 1 percent of the money it raised on program services. For every $100 contributed, only $16 ended up going to veterans and $84 was spent on operations expenses, such as salaries and marketing. That's more than double what is recommended.
AVRF says on its Web site that it provides financial assistance to homeless veterans as well as money for mortgages, rent, medical payments and veterans' memorials. It promises that donations also will go toward "thinking of you" care packages to vets in hospitals.
Another group flagged by the AIP is the Military Order of the Purple Heart Service Foundation, which also received a failing grade. While 32 percent of the funds raised by the organization goes toward charitable causes, the group is considered a donor risk because it is not very open about sharing its financial information.
Purple Heart, as it's known, collects used clothing to give to former military members in need and also promises to "raise funds for service, welfare and rehabilitation work in connection with the members of the Military Order of the Purple Heart of the U.S.A." and other disabled or wounded vets, according to its Web site.
A third failing veterans charity is the National Veterans Services Fund, which vows to give money raised to those who fought in the Vietnam and Gulf wars, with a focus on families with disabled children. That group gives only 2 percent and spends $97 on operational costs for every $100 it makes, according to the report.
There are no laws regulating the amount of money charities spend on overhead, fundraising or giving. The institute's report suggests that the 10 charities that received failing grades, along with eight more that received a D grade, were managing their resources poorly. Other large organizations, including the Veterans of Foreign Wars of the U.S. and the USO passed, but just barely, squeaking by with a C- and a C+, respectively.
But the AIP also identified the "good" charities that provide funds for American veterans.
The Fisher House Foundation is among those that got top marks for its work. It passes on 92 percent of the funds it raises and spends only $2 for every $100 it collects.
The foundation funds and builds "comfort houses" on the grounds of military bases and hospitals around the world so that family members can stay close to their loved ones who are serving their country.
The Intrepid Fallen Heroes Fund is another of the best veterans charities donors can contribute to. It gives all but about 3 percent of money raised and spends only about $1 to raise $100.
Through its Intrepid Museums around the country and other means of raising money, the fund supports members of the Armed Forces and their families.
And the National Military Family Association is another safe bet for those wanting to send money to veterans, spending just 18 percent on operational expenses and $9 for every $100 it raises.
The group's contributions go toward "active duty, reserve, survivor and retiree families of the Air Force, Army, Navy, Marine Corps, Coast Guard and the Commissioned Corps of the Public Health Service and National Oceanic Atmospheric Administration," according to its Web site.
The House Committee on Oversight and Government Reform heard the AIP's President Daniel Borochoff testify as to why so many of the nonprofits failed to receive passing marks for their efficiency in raising funds and getting it to those who need it.
"Right now, there's incredible waste out there and it's being done in the name of our noble veterans," Borochoff said.
His group says many of the veterans' philanthropies raise money using for-profit groups hired to do direct mail or telemarketing campaigns that solicit donors indiscriminately, rather than targeting those more likely to give.
The problem is even more significant because some 200,000 veterans — or about a third of the entire adult homeless population — are living on the streets, according to the AIP.
"A huge percentage of our homeless are veterans," said AIP analyst Laurie Styron. "There's a lot of need for veterans out there."
The AIP rated the charities based on several factors, including how much is spent to raise funds, the percentage they donate to their causes, top salaries they pay employees and the level of transparency with their accounting records.
"The biggest concern is just how highly inefficient many of the veterans' groups tend to be," Styron said. "It’s a highly popular cause. It’s a cause that’s easy to raise money for because it tugs at the heartstrings. It’s easy to guilt people into giving."