Board Chair Takes Helm at Wounded Warrior—but Donors Have the Floor

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NPQ has long been covering the topic of stakeholder revolts, wherein board and leadership of nonprofits violate the values of constituents, donors, and other stakeholders, and stakeholders rise up in response. Are we looking at another such case here?

We knew that John Melia, founder of the Wounded Warrior Project, had offered to return to the organization after CEO Steve Nardizzi and his COO Al Giordano were ousted last week, but now that offer has apparently garnered the support of a group on Facebook and a petition on Still, as far as we know, the board has yet to indicate any interest or get in touch with Melia – not that NPQ feels that his candidacy per se is so important to the organization’s future but the donor involvement is. Meanwhile, according to the New York Times, Anthony Odierno, the WWP board chair, has taken the position of interim CEO. He is beginning to speak on behalf of the organization, but is it too little, too late?

Odierno is still somewhat vague about the board’s reasons for the abrupt double firing—he’s willing to say that the board took issue with “cultural and policy findings” when deciding to fire Nardizzi and Giordano—but he has continued to defend the group’s fundraising spending and has told CBS he is putting a committee together to search for a new exec:

We’re going to consider any and all candidates that we think is the best fit for this organization and will keep this organization forward and serving the needs to come because the thing about those who have been wounded is they’re going to be living, in many cases, with these injuries for 10, 20 and 30 years, and Wounded Warrior Project needs to be there to serve them.

As he moves to take charge, Odierno, who insists that the board moved quickly after the allegations of excess were surfaced in January, said donations have fallen off. “Right now we are in a position where we can still meet our obligations,” he said. “But I am concerned about our ability to meet our obligations in the future.”That concern is probably not ill placed, because during this long period of silence, broken only by the odd periodic defensive statement since the scandal hit the press, it may not be just the staff leadership that has lost trust. The New York Times reports that major fundraiser Fred Kane was shocked by the shape of the organization’s response to media after watching a young former Army captain who had lost an arm and a leg in Afghanistan recite an awkward response to the allegations.

“Why was that poor guy placed in front of a CBS News crew?” asked Mr. Kane, who has raised more than $325,000 for the organization, in an email sent in February to dozens of high-level donors. “Where was Steve Nardizzi and why didn’t he face the reporter?” Mr. Kane asked.

In fact, employees report that Nardizzi has been missing from the organization for some time. “It was like he had been kidnapped,” said one employee. “There was no one there to tell us what was going on or how we were going to get through this.” His cellphone, as well as Giordano’s, have apparently been disconnected.

For that matter, where has the board been? Will the same board that has allowed these problems to develop and continue under their watch be trusted to carry it forward? Will donors agree to that?

Now, Melia has advanced a 10-point plan that the organization might wish to consider, with or without the founder or this particular board:

  1. WWP will immediately review all salaries, consulting contracts and leases and take action to ensure excessive compensation for any of its executives, employees or vendors is dealt with swiftly.
  2. WWP will no longer pay bonuses to any employee or executive.
  3. WWP travel, lodging, and per diem rates will be determined using the United States General Services Administration (GSA). These are the very same rates used by our Active Duty service members when they travel. No WWP employee will travel in any class other than economy.
  4. WWP will immediately nullify all nondisclosure and non-disparagement agreements which employees were forced to sign.
  5. WWP will disclose the identities, purpose and pay of all consultants.
  6. WWP will disclose the identities of all grantee organizations, as well as the amounts granted.
  7. WWP will refocus on its core mission of providing aid and comfort to wounded veterans and ensuring family members are supported financially during the recovery period.
  8. WWP will effectively advocate on behalf of veterans and will demand accountability from the Veterans Administration.
  9. WWP will create a position for an Officer for Integrity and Compliance. This Officer will report directly to the Board of Directors.
  10. WWP will immediately suspend television marketing. WWP will never again employ advertising depicting a wounded veteran in a helpless condition. WWP will never again employ advertising depicting a despondent family member.

We are willing to bet that some of these points will resonate well with donors even as the board remains restrained about what they believe went wrong. We have seen this pattern before, wherein the board of a nonprofit thinks it has more control, more time, and more license than it actually does—only to get pulled up short. It will be interesting to see how this plays out.

  • Fred Kaplan

    LOL the Board Chair takes over management?????? IF THE BOARD was doing their JOB they would have already have policies in place years ago. Most of the board should be replaced since THEY WERE NOT doing their duty to the donors nor the veterans! THEY allowed and perhaps even fostered this culture and attitude. I wonder how many volunteers, or employees left, got fed up or fired because they either brought this to the board and/or managements attention and NOTHING WAS DONE? I doubt any of the “good ole boy” board left since they probably are all friends and appointed each other. This is another example of a BOARDS FAILURE to do its JOB BEFORE they are forced to take action.

  • Why no defense for WWP at least from the Charity Defense Council (CDC) here or anywhere, especially on CDC’s website and social media channels?

    Steve Nardizzi helped create CDC with his early high-profile endorsement and as a member of the CDC Advisory Council. Nardizzi apparently broke no laws. He only executed the CDC vision, albeit with a flourish. If there were ever a time for CDC to test the mettle of its mission, this would be the time.

    Nardizzi is gone. What is on trial here is the CDC mission.

    Bold. That word is used twice in CDC’s standard three-sentence description ending with, “…changing the way people think about changing the world.”

    Where is this boldness now in defending CDC’s friend, let alone CDC’s mission?

    Here is CDC’s founder proposing that “Mark Zuckerberg and Priscilla Chan use their money for fundraising.”

    Pallotta uses two examples to support his case: Pallotta TeamWorks and WWP. One had to do with breast cancer and AIDS and the other with veterans. Both resulted in scandal when ordinary donors (not the investors) learned what percentage of their gifts actually went to relieving the pain of loved ones.

    There is never any problem when the donor knows upfront about the percentages. Yes, generous and enlightened philanthropists should and do fund overhead, even when it’s 44% as Pallotta proudly proclaims here in the case of WWP. But could WWP ever achieve its fundraising success if it forthrightly declared its 44% overhead on their television ads? There is FTC Truth-in-Advertising law at play here.

    In the end, changing the world results from great courage and sacrifice, but hardly ever as a result of money alone. The world’s ills that nonprofits work to heal are the result of wealth without work, pleasure without conscience, knowledge without character, commerce without morality, science without humanity, politics without principle. These ills will not go away with well funded solutions of the day.

    Charity scandals almost always involve easily exploited causes such as cancer and veterans. No one cares when a successful university football coach or president receives many multiples of what WWP paid Nardizzi. It has to do with truth in advertising. Just because there is an effort underway “to change the way people think about changing the world,” does not mean that people are changing they way they think about their loved ones who are in the balance.

    Let’s see how much money Pallotta or Nardizzi could raise for prison reform or legal aid. Those who do fight every day for these and so many “lost causes” would rather fail with honor than succeed by fraud (Sophocles). Their courage and sacrifice and their powerful witness more than whatever money they can raise will be what changes the world.