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Lawmakers scrutinize veterans charities

Lawmakers are issuing a second subpoena to the president of two veterans charities that raised more than $98 million last year in support of wounded troops, after he failed to appear to testify Thursday.

Roger Chapin, president of the Coalition to Salute America’s Heroes Foundation and Help Hospitalized Veterans, “has gone into hiding and evaded the best efforts of the U.S. Marshals trying to serve him,” said Rep. Henry Waxman, D-Calif., who chairs the House Oversight and Government Reform Committee.

“Mr. Chapin’s charities raised over $98 million last year, yet he refused to appear to answer questions about how this money has been spent,” Waxman said.

Lawmakers contend that less than one-third of the money raised by Chapin’s charities actually goes to help veterans. But his is hardly an isolated case.

“Our committee has learned that a disturbing number of groups are raising millions of dollars in the name of helping veterans but keeping most of the donations for themselves,” Waxman said. “These groups and the professional fundraisers they employ blatantly line their own pockets.”

The American Institute of Philanthropy issued a report card on 29 military and veterans’ charities. Eight — including some of the nation’s largest — returned less than a third of donated funds to veterans and their families.

A total of 12 charities received failing ratings from the institute based on the high proportion of donated dollars that they devote to fundraising. They are:

The American Ex-Prisoners of War Service Foundation, American Veterans Coalition, American Veterans Relief Foundation, AMVETS National Service Foundation, Disabled Veterans Association, Freedom Alliance, Military Order of the Purple Heart Service Foundation, National Veterans Services Fund, NCOA National Defense Foundation, Paralyzed Veterans of America, VietNow National Headquarters, and Chapin’s Help Hospitalized Veterans/Coalition to Salute America’s Heroes.

Daniel Borochoff, president of the American Institute of Philanthropy, said it is “a national disgrace that hundreds of millions of dollars raised in the name of injured veterans … are being squandered.”

The institute says charities generally should spend no more than 35 percent of their donations on fundraising.

The Fisher House Foundation, which builds comfort homes to provide low- or no-cost lodging for families of hospitalized troops to be near their loved ones during treatment and recuperation, got an A+ from the institute for using more than 90 percent of its donations to support veterans and their families.

Army Emergency Relief, the Air Force Aid Society and the Navy-Marine Corps Relief Society each got an A+, as did the Intrepid Fallen Heroes Fund, which recently opened a rehabilitative facility for wounded troops in San Antonio and is planning another center for traumatic brain injury treatment in Bethesda, Md.

The institute gave the National Military Family Association an A, while the Armed Services YMCA of the USA got an A-.

The Better Business Bureau’s Wise Giving Alliance regularly evaluates charities nationwide. Bennett Weiner, chief operating officer, said about half of national veterans’ charities provide none of the requested information and materials that the alliance needs to complete their evaluations.

The Supreme Court has ruled that charities are not required to disclose to people how they spend their money when soliciting donations. But those who actually donate must be provided such information if they ask for it, said Tracy McCurdy, director of Pennsylvania’s Bureau of Charitable Organizations.

McCurdy said no federal agency regulates charities. Her bureau has investigators, auditors and a prosecuting attorney, but if Pennsylvania shuts down a charity for violating state law, it may just move to another state, she said.

Officials of two veterans charities said their high fundraising costs are necessary because it is difficult for smaller, newer charities to raise money on their own.

“These [fundraising companies] ask for long contracts ... we can’t get out of it,” said Pamela Seman, executive director of the Disabled Veterans Association, which spends 71 percent of donated dollars on fundraising.

“We know people are not happy with the large amount being spent on fundraising. We’re not proud to be one of those with high fundraising costs,” said Robert Friend, president of the American Veterans Coalition, which spends 59 percent of all donors’ dollars on fundraising.

Seman and Friend said their groups have taken steps to scale back fundraising costs. But without help from fundraising companies, Friend said, “We couldn’t get the word out and raise enough money.”