Wounded Warrior Project Scandal

Introduction

Wounded warrior project is an organization that provides veterans and charity programs and services to wounded veterans especially following the September 11 terror attack in the US that wounded many veterans and caused death to many others. The organization is a nonprofit organization which aims at providing veteran services to the injured veterans since they need the services for them to recover. The organization has over 70,000 registered members and has partnered with several other charitable organizations such as Red Cross in order to help the people. The organization has over 500 staffs thus need enough funds to run the organization as well as provide wages to the staff members. The Wounded Warrior Project has been criticized my many since it spends on itself recently instead of focusing on helping the veterans. Employees in the organization suggest that meetings take place in lavish areas where they spend about $500 each on accommodation. The organization depends on donations and end up misusing the funds on less important issues such as attending meetings in lavish areas. The organization is said to have spent millions in lobbying campaigns in defense of how it manages its funds and in fighting legislative measures on how nonprofit organizations should spend their money. Employees complain that the organization has focused on raising money to protect itself rather than helping the veterans which was its main goal. Employees who try to question the organization are fired since they do not fit to the organization’s culture. Employees who raise issues about spending are fired which is not fair according to the labor laws and regulations. Therefore this paper will focus on discussing the Wounded Warrior Project, its history, challenges and recommendations after the scandal that almost lead to its closure.

History of Wounded Warrior Project and Scandal

Wounded Warrior Project is a nonprofit organization with its headquarters based in Florida at Jacksonville with the aim of providing veteran services (Rosenthal, 2011). The organization was founded by John Melia who had been seriously wounded in a helicopter crash while serving as marine veteran in Somalia during 1992 (Rosenthal, 2011). The mission of the organization is to put honor and empower wounded warriors. Mr. Melia after remembering whatever he had gone through started visiting wounded military personnel in the hospital and providing them with personal items. Examples of such personal items include toothpaste, socks among other items. A number of people were attracted by his actions and thus he managed to get some employees who would help him distribute these personal items. Among the interested parties included Mr. Nardizzi who was a lawyer but decided to join the team that provided veteran services (Rosenthal, 2011). Mr. Melia and his team reached out for donations which would help them get more items and benefits in order to help veterans cope up with traumas and stresses. By the year 2009 the team had established an organization which had over 50 employees and had generated more than 20 million in revenue (Rosenthal, 2011). This growth saw Mr. Melia and Mr. Nardizzi fight for power since they all wanted to be recognized. Mr. Nardizzi wanted the organization expanded while the founder, Mr. Melia was not for that idea. This led to resignation of Mr. Melia who left the organization under the leadership of Mr. Nardizzi who wanted to expand the organization. When Mr. Nardizzi took over the organization, it suffered some economic downturn since donations were not much as they used to be.

Mr. Nardizzi did fundraisings in order to get money to run the organization which now had many employees. He used much money during the fundraisings with the tax records showing that he used more than $30 million on fundraising in 2014 (Groden, 2016). In addition, the organization produced encouraging ads showing different veterans fighting to get back their health. As a result of these most people supported the organizations through donations. However, as the donations increased the organization became wasteful since it started misusing the funds. Employees started misusing money through spending it on ridiculous things yet nobody would question. Connie Chapman, who was in charge of the organization’s office at Seattle said that she would fly to New York to just report to the person supervising her (Watt, 2016). All other employees flying to carry out veteran services would travel through the business class and spend much money on the tickets. Tax records shows the organization was spending about $7 million on travel expenses alone showing how peoples’ donations were being misused (Ross, 2016). This shows that the organization spent more in its building than focusing on helping the veterans which was its main goal. Though the Wounded Warrior Project confirms that it uses 80% of the donations on carrying out veteran services, charity watchdogs suggest that the organization uses most funds on other services.  In 2011, Charity Watch gave the organization a D in its spending rate indicating that the organization was reported to misusing its funds (Groden, 2016). The spending of the organization attracted attention since even employees complained because the organization used the funds in wrong ways.

Mike Linnington who is wounded warrior project CEO announced that the organization had lost about $100 million which represented about 25% of the donations made by people (Groden, 2016). This happened since the scandal about the organization started happening in January 2016. Watchdogs suggested that the organization did not respect the donations made by people since it had an unhealthy organization culture. In addition the organization was said to be wasteful thus wasting peoples’ donations towards helping the veterans. The organization was caught up in the spending scandal where people did not understand how the organization would misuse funds whereas there are needy veterans (Groden, 2016). The organization has employed so many employees while it is a nonprofit organization that needs volunteers rather than employees who will require employment benefits and wages. WWP is said to be spending most of the donations on travel expenses and taking employees to expensive hotels. People suggested that taking employees to expensive places is not part of team building. The organization should instead focus on helping the wounded veterans and empowering them since it is the main goal and mission of the organization. The organization has neglected its mission thus raising concerns on how it spends donations from people. People want their money accounted for since they want to see wounded veterans brought back to good health. The organization was observed to hold parties and thus spend more on parties and staff rather than coming up with better strategies on how to assist the veterans (Groden, 2016). Employees in the organization are just common civil servants while former veterans are supposed to be the employees in the organization.

WWP fired its two top executives following the scandal where reports showed out that the organization spent on lavish things (Groden, 2016). The organization spent money on parties, travel expenses and other lavish expenses until the public complained since the veterans were not being helped. Financial audit carried out in the organization showed that some policies and procedures have not been in line with the organizations current pace. Therefore the organization needs to come with a more healthy organization culture that will ensure it does not face a spending scandal again. The organization fired the two top executives as one way of reducing spending on lavish things. First the organization needed to cut off the numerous meetings that took place at lavish hotels and the big parties that were catered for by the organization. Some donors withdrew their support for the organization after realizing it spent the money in carrying out lavish activities instead of helping the warriors. Major donors called for Nardizzi to be fired stating that the organization spent on unnecessary things since he took over in 2009 (Groden, 2016). The veterans were not the organizations major goal thus donors felt the organization was a disappointment and needed thorough scrutiny or rather change of management. The organization though insisted in 2016 that it had a good organization culture and was still healthy. The CEO, Linnington said his organization did not spend on lavish things bur rather on helping and reaching out to veterans (Erb, 2015). He instated that the organization would not change who they are since many veterans had been helped by the organization. He said that they are committed to helping veterans and investing in some other important programs.

The Outcome of WWP Scandal

The organization as a result of the scandal fired two of its major top executives. In addition it closed some offices as one way of cutting the expenses since some donors had started withdrawing their support for the organization. The organization incurred losses since donors withdrew their support and had no faith in the organization. The organization damaged its image to the public who now viewed it as money grabbing organization which was exploiting money to the public (Rosenthal, 2011). People had little faith in this nonprofit organization since the scandal was all over the media and even led to firing of two major executive officials. People failed tom understand how the organization would spend donations on lavish things while the veterans lead poor lives. The organization was put under scrutiny such that it was required to account for its funds to the shareholders and this meant that financial audits would be carried out in order to show how the organization spend the generated revenue.

The Law in Practice

Tax records showed that the organization spent most of its revenue in catering for lavish things rather than helping the veterans. The regulations of the organization indicated that organization was nonprofit in nature therefore needing more volunteers compared to employees. However, the organization employed many employees who need employment benefits and other services yet the organization depends on fundraising and donations from well wishers (Rosenthal, 2011). The donors wanted their money accounted for since most was spent on staff rather than helping the needy veterans. The wasted money would have been used in helping out the needy that need medical attention rather than giving staff bonuses. The organization is to be guided by the corporate law to which it failed to observe. The organization was formed as a nonprofit organization basically focusing its attention on wounded warriors but focused on empowering the staff. The organization was formed legally and should therefore comply with the corporate laws since it is answerable to the donors who fund it. Therefore the organization should account for funds to the donors since they are the main stakeholders in the organization (Rosenthal, 2011). In addition, the organization should serve the veterans; empower them until they gain back their health. The organization according to the corporate laws should have and follow its mission and vision (Weisfeld, et al, 2009). In addition it should have a healthy organization culture that will ensure it remains transparent to the donors and serve the veterans as well. Failing to follow the corporate law should see the top executives facing the consequences thus the management should respect the laws as well as state laws.

Ethical Issues

Looking at the WWP, people would judge that it does not meet or fulfill the virtue ethics since it fails to meet its goals. The main goal of forming WWP was reaching out to the wounded warriors therefore it is a nonprofit organization. Being a nonprofit organization, it is supposed to give back to the society rather than focusing on its expansion and empowering the staff (Net & Lazare, 2016). Organizations that are started on purposes of generating profit are however different from the nonprofits since they are allowed to give benefits to their employees. Nonprofit organizations such as WWP should focus on providing services to people and encourage volunteers instead of employing employees. WWP based on the virtue ethics failed to meet its purpose since it focused more on empowering its staff instead of focusing on the needy people (Minear, 2010). The organization should provide the best services and products to the veterans who have been wounded on official duties thus are warriors of the nation. The nonprofits are not subjected to much taxes compared to for-profit organizations that are subjected to high taxes. WWP have been accused of taking this advantage and failing to act like a nonprofit organization since it generates revenue and use it on empowering its staff (Net & Lazare, 2016). WWP takes advantage of generosity from the society and the people and end up misusing funds which it should use in reaching out to the veterans. The organization fails to meet the virtue ethics thus failing and disappointing the people it should be helping. Instead of coming up with lavish parties, the organization should focus on expanding its services to the veterans since the charity organization is supported by different donors. The management of the organization fails to follow ethical rules since they use donated money for their own good instead of helping the veterans.

Recommendations

• WWP should change its strategies and focus on its initial goal which was to ensure veterans are empowered and honored (Woodruff et al, 2014). The organization should ensure veterans do not live in poverty as they live currently whereas the employees are living lavish lives. The organization should focus on ensuring veterans live healthy lives instead of misusing the funds and subjecting veterans to poor lives whereas donors provide finances for the organization to reach out to the veterans.
• WWP should remain ethical at all times in order to prevent occurrence of spending scandals. The organization should be transparent and account for its funds. Currently the organization is viewed by people as a money grabbing organization in the name of nonprofit organization (Weng et al, 2015). This shows that people do not trust the organization since it has not been transparent to the people. WWP should therefore change and adopt strategies that will ensure the donors’ money is accounted for and that veterans benefit from the money.
• WWP should adopt a healthy organization culture therefore having transparent, qualified and skilled management team. The organization should have good and efficient leaders that will ensure it has a healthy organization culture. The current organization culture is not healthy thus consider as toxic since it focuses more on benefiting the organization rather than reaching out to the veterans. Having efficient and skilled leaders will see the organization adopt a healthy organization culture therefore changing the current view of people on the organization (Esswein, 2016).
• WWP should abide by the corporate laws since it a nonprofit organization by nature. It should strictly help the society and the people and therefore focus on coming up with more strategies on developing services and products to veterans. The organization should follow the corporate as well as state laws in order to remain successful (Weng et al, 2015). The organization should create a better image to the people since it has a bad reputation currently and people have no faith in it. The organization should prove to people it is worth the donations through helping the veterans and giving them better lives.
• WWP should focus on rebuilding its image to the people since it has damaged its image and people no longer view it as a help centre. Some donors stared withdrawing their support which means loss to the organization since it cannot remain successful without support from its major donors. People have little faith in the organization since they have witnessed the organization spend on lavish things while the veterans are suffering and leading poor lives.

Conclusion

The above discussion shows out that WWP is a nonprofit organization that was meant to provide services to veterans and honor them therefore giving them good lives. The organization however fails to provide the necessary support to the veterans and instead focus on its expansion and supporting its staff. The organization misuses the funds in coming up with lavish parties and holding meetings in lavish hotels. The donors of the organization fail to understand how come the organization spends too much on staff instead of focusing on giving the veterans better lives! People have no faith in the organization and view it as money grabbing organization since it gets money from donors and use it on other programs rather than helping the veterans. Tax records shows the organization was spending about $7 million on travel expenses alone showing how peoples’ donations were being misused. This shows that the organization spent more in its building than focusing on helping the veterans which was its main goal. The organization was formed legally and should therefore comply with the corporate laws since it is answerable to the donors who fund it. The organization should now focus on creating a better image to the public since it has damaged its image as a result of lavish spending on donations.

References

Erb, K. P. (2015). 12 Days Of Charitable Giving 2015: Wounded Warrior Project. Forbes.Com, 2.

Esswein, P. M. (2016). Flying Wounded Warriors Home. Kiplinger's Personal Finance, 70(11), 20.

Groden, C. (2016). Wounded Warrior Project Sacks Two Executives Over Spending Scandal.             Fortune.Com, 1.

Minear, L. (2010). Through veterans' eyes: The Iraq and Afghanistan experience. Washington,    D.C: Potomac Books.

Net. A, & Lazare. S (2016) Famous Charity For Veterans Accused Of Inappropriate And Lavish             Expenditures. Retrieved from http://www.alternet.org/famous-charity-veterans-accused-            inappropriate-and-lavish-expenditures

Rosenthal.L (2011) Good Counsel: meeting the legal needs of nonprofits. John Wiley&sons.

Ross, B. (2016). "Wounded Warrior' Scandal. World News With Diane Sawyer, 1.

Watt, A. (2016). Wounded Warrior Project bonds family support members through           candymaking. Candy Industry, 181(2), 39.

Weisfeld, N. E., Weisfeld, V. D., Liverman, C. T., & Institute of Medicine (U.S.). (2009).            Military medical ethics: Issues regarding dual loyalties : workshop summary.          Washington D.C: National Academies Press.

Weng, S. S., Rotabi, K. S., McIntosh, E. M., High, J. G., Pohl, A., & Herrmann, A. (2015). A       Virginia Wounded Warrior and School of Social Work Partnership: The “MISSION:          Healthy Relationships” Project and Student Engagement. Journal Of Social Work    Education, 51S44-S58.

Woodruff, S. I., Galarneau, M. R., Luu, B. N., Sack, D., & Han, P. (2014). A Study Protocol for Tracking Quality of Life Among U.S. Service Members Wounded in Iraq and           Afghanistan: The Wounded Warrior Recovery Project. Military Medicine, 179(3), 265-  272. doi:10.7205/MILMED-D-13-00444