The Wounded Warrior Project was created in 2003 to help wounded veterans coming back to the United States. It started modestly, but grew dramatically in recent years, taking in almost a billion dollars in donations since 2009. However, despite much good work helping returning veterans, there have been charges for quite a while of lavish spending unrelated to the charity’s purposes as well as large salaries paid to administrators, particularly Steve Nardizzi, its chief executive and his right hand man Al Giordano. Following an internal investigation, Nardizzi and Giordano both had their employment with the Wounded Warrior Project terminated last week. According to charitynavigator.org approximately 40% of the charities donations were spent on fundraising and administrative expenses in 2014.
Some charities are pure scams where scammers take all of the donations and never provide payments or services to anyone other than the phony charity’s administrators. However, other “legitimate” charities may, strictly speaking, not be violating any laws, but take an outrageous amount of money to pay inflated salaries of administrators and costly fund raising efforts that do little to advance the charitable purposes of these charities. I have written many times about various charities that fit this pattern.
As a rule of thumb, charities that spend more than 25 to 33% of their donations on their own administrative costs including large salaries may be considered to be charities you may wish to avoid. A good place to go to find out whether or not a charity is first and foremost a scam and then to learn how much the charity spends of its donations on its own administrative expenses is charitynavigator.org where you can find this information for free.