Veterans charity spends majority of donations on fundraising
CHARLESTON, W.Va. -- For every dollar the West Virginia Vietnam Veterans Foundation spent last year, a little more than one penny actually went to veterans-related activities.
Most of the $37,700 spent by the Bluefield-based organization instead went to professional fees, including a telemarketing company paid to solicit donations, according to tax filings.
The Better Business Bureau says a charity shouldn't spend more than 35 percent of the money it receives through fundraising on fundraising expenses. National charity watchdog group Charity Navigator says no more than 25 percent of total expenses should be for fundraising and administrative costs combined.
But representatives of the foundation said tax documents don't tell the whole story, and plenty of other organizations give large percentages of the money they receive to professional solicitors.
The foundation began in 1997.
"We're more or less a granting organization. We take care of a lot of veterans needs," President C.E. Ball said in a November phone interview.
Tax forms indicate the foundation exists to help provide West Virginia veterans with "emergency funds," described as money needed for housing, food, utilities, clothing and medical expenses. Forms also say the organization has supported youth anti-drug programs, programs that provide gifts to local foster children and other activities.
Treasurer and CFO David Simmons said the group does everything from giving veterans wheelchairs to driving them to the hospital.
People give thousands of dollars every year to support the foundation: Tax forms show it received more than $630,000 from 2002 to 2012.
Ball and Simmons were quick to point out the foundation doesn't pay any salaries.
"Yeah, everything we spend goes toward the veterans, except for our basic office fees." Ball said.
Those fees account for more than 86 percent of the money the foundation spent during the same 11-year time frame.
More than two-thirds -- $423,000 -- covered fees that include the cost of a professional fundraiser.
From 2002 to 2006, the foundation spent an average of 43 percent of its money on actual veteran-related activities. The rest went to fees, rent or other expenses. At no point during that time period did the organization raise more than $22,000 or spend more than $10,000 on programming.
In 2007, the foundation raised $144,275. A little more than $10,000 went to the program services Ball and Simmons describe as the purpose of the foundation. More than $105,000 went to professional fundraising costs.
During the next five years the foundation would spend more than 10 percent on actual veterans programs only once -- 12.5 percent in 2009.
The actual dollar amount spent on programming never surpassed $12,600.
From 2007 to 2012, it spent more money on rent and fees than donations to veterans.
In 2008, it spent nearly $20,000 on "travel, meeting, computer, software, furniture, supplies" and $3,700 on rent, utilities and maintenance.
It spent $12,500 on veteran-related program services that same year.
In 2012, it spent $33,386 on fees, including fundraising costs. It also spent $5,200 on rent, utilities and maintenance costs, according to tax records.
It donated $506: $491 in emergency funds for veterans and a $14.95 grant to the National youth Anti-Drug Education Program.
Simmons was reluctant to name the organization's fundraising company. Eventually, he told a Daily Mail reporter the foundation uses Associated Community Services, Inc.
According to a copy of a 2007 contract obtained by the Daily Mail, ACS gets to keep 80 percent of the money it raises. The contract is effective for two years and renews automatically every year thereafter unless either party gives written notice to terminate.
The Michigan-based telemarketer solicits donations for organizations all over the country. It's also in trouble all over the country.
From 2002 to 2013, ACS had at least 16 disciplinary actions in nine different states, according to an investigation by the Tampa Bay Times and the Center for Investigative Reporting.
Those states -- not including West Virginia -- issued $155,000 in fines against ACS specifically in connection to questionable actions, according to the investigation.
In 2008, the state of Missouri issued a $100,000 fine against ACS for "engaging in manipulative and high pressure fundraising on Missourians who asked not to be called."
The company solicits for at least seven of the 50 organizations that made it onto the investigation's "America's Worst Charities" list. One of the seven, and several others on the list, use the word "veterans" in their names.
That's common, said Sandra Miniutti, vice president of marketing and CFO for Charity Navigator.
"We see this a lot with veterans groups because they pull at the heart strings and so people are less likely to say no when they get those phone calls at dinner," Miniutti said in a phone message.
"How can you say no to supporting heroes?"
Trying to help
Simmons and Ball, who both argued the Daily Mail needed permission before it could publish information about the foundation, said there's no way around using expensive telemarketers.
"I think you need to research telemarketing and find out what the average rate is for a telemarketing company," Simmons said.
The tax forms don't show the amount of money, materials or time foundation officers provide to the organization. The foundation doesn't list donations made by the board or staff "because it would look like we're drawing a salary," Ball said.
Asked why the foundation doesn't spend more on veterans, they blamed the economy and a lack of willingness by the public to donate.
"We're just a bunch of veterans who are trying to help the community," Ball said.
Veterans who need help can access application forms on the foundation's website, he said. After providing a web address that is no longer active, he said the website has had issues in the past.
The website listed on the organization's tax forms, www.wvvvf.com, provides very little information. There's a foundation logo, an American flag graphic, images of logos for service organizations and a post office box address.
An apparent security warning was activated when the Daily Mail visited the website.
There are no links or details about how to get help from the organization and no phone number.
A Google search shows the foundation is listed on several charity-related websites, but each site also provides little information about services provided.
Sen. Joe Manchin, D-W.Va., lists the foundation as a "veterans service organization" on his Senate website. The foundation is listed with other entities that have endorsed the Congressional Veterans Jobs Caucus and that "proudly hire veterans."
"Our office does not endorse every organization that is involved with the I Hire Vets Caucus but promotes those that are committed to hiring and helping veterans," Manchin spokesman Jonathan Kott said.
Ball and Simmons were adamant that no one affiliated with the foundation is paid.
Ball and Simmons repeatedly pointed out that most organizations must use paid solicitors.
"It's very true. It's sad, but it's true. That's the only way ..." Ball said.
In West Virginia, the secretary of state and the Attorney General's Office register and monitor charities.
There are more than 3,400 organizations currently licensed by the Secretary of State's Office to solicit donations in West Virginia, according to an online database. It shows the amount of money these organizations spend on administrative, fundraising and programming costs.
The office derives the information directly from tax records filed with the secretary of state and the Internal Revenue Service, said Jake Glance, spokesman for the office.
More than 100 organizations listed in the database spend more than a third of their expenses on fundraising, above the Better Business Bureau's threshold.
Glance acknowledged the database is not perfect: There are negative percentages listed for some charities, and the reflected costs for some programs don't total 100 percent.
A representative for the secretary of state said those could be input errors. There could be other problems -- including an organization filling in tax forms incorrectly -- included in the database.
The list is one of several tools provided by the state for people researching charities.
The secretary of state also prints a "guide for giving" that offers advice for those looking to make a charitable contribution. People should research an organization before giving and send money directly to an organization as opposed to donating over the phone, the guide states.
West Virginia Attorney General Patrick Morrisey issued a similar consumer protection guide in late November. More tips on giving are available on the attorney general's website and by calling the consumer protection office at 1-800-368-8808.
More information about national organizations is also available online from organizations like Charity Navigator, nonprofit database GuideStar and the National Center for Charitable Statistics.