June 15, 2019; Florida Times-Union (Jacksonville, FL)
Does accepting responsibility have any effect on how fast an organization recovers after a scandal? We can’t say for sure, but here’s a piece of anecdotal evidence to think about.
As regular NPQ readers will remember, the Wounded Warrior Project (WWP) ran into a buzzsaw of its own making in 2015 when its constituency became disenchanted with the way it was being managed—specifically, with evidence of “lavish spending.” This threw what had been a remarkable multi-year growth trajectory not just into a stall but into reverse. The organization plummeted from $373 million in donations for FY 2015 to $211 million in 2017, forcing the organization to lay off 85 people—approximately 15 percent of its staff, including a number of higher paid positions.
However, in contrast to Susan G. Komen, which continued to lose revenue even as it denied any wrongdoing, WWP made a variety of changes, including a virtual clean sweep of leadership, and by the end of FY2018 its donations, were beginning to climb again, ending the year at $246 million donated, a 16 percent increase. This would seem to confirm CEO Mike Linnington’s assertions last year that the organization was rebounding financially, and Wounded Warrior Project spokesman Chris Obarski says he expects continued growth from here.
Traditionally, one of the safest revenue bases any nonprofit can have is a wide base of donors, but Rena Coughlin, CEO for the Nonprofit Center of Northeast Florida, points out that what made the organization vulnerable wasn’t any lack of diversity in its funding base but actions that broke faith with a large number of donors.
“That is a terrific, strong base, but it’s also very much based on their trust,” Coughlin said. “So, you have to manage that trust and re-earn it, and I think that’s exactly what their strategy is.”
The nonprofit went through intense scrutiny by organizations that track and evaluate charities. US Sen. Charles Grassley (R-IA), who is known for taking hard looks at charitable organization, launched his own inquiry that concluded in 2017 that Wounded Warrior Project was “taking steps to fix shortcomings.”
In contrast, though Susan G. Komen brought in $350 million in revenue in 2011, its fundraising results have declined year after year, and this past year, they brought in only around $77 million. Founder Nancy Brinker, however, remains as its Chair of Global Strategy.—Ruth McCambridge