Wounded Warrior Project

One morning in 1992, John Melia, then a U.S. Marine, was flying in a helicopter on a training mission off the coast of Somalia. The helicopter crashed into the ocean, killing four Marines and wounding 14. Melia suffered burns and a traumatic brain injury.

After being evacuated to the U.S., Melia recuperated at Dover Air Force Base in Delaware. He eventually retired from the Marines and went to work for non-profits, including the Washington, D.C.-based Paralyzed Veterans of America.

About 15 years ago, Melia was watching news footage of the U.S. military buildup in Iraq when an image of an injured soldier being evacuated by helicopter brought back memories. “I thought, ‘Boy, I bet that guy’s getting ready to go on the same type of journey that I did,’ ” he told industry website NonProfit Pro.

From his home in Virginia, Melia raised $5,000 and filled backpacks with toiletries, a phone card, CD player and change of clothes to give to hospitalized Iraq war vets. After requests for more backpacks poured in, he decided to found a non-profit to help injured veterans, calling the effort the Wounded Warrior Project.

Initially, WWP operated as a division of the New York-based United Spinal Association. In 2005, it became an independent charity. And in 2006, it relocated its headquarters to Jacksonville, drawn in part by a desire to be near the Ponte Vedra Beach-based PGA Tour, a key corporate partner.

Over time, WWP expanded to helping injured war vets readjust to civilian life. In addition to distributing backpacks, it now provides mental health and benefits counseling, outdoor rehabilitative retreats and other programs aimed at filling in gaps in government care.

In 2009, Steven Nardizzi, a lawyer and non-profit executive with no military experience, replaced Melia as CEO and set out ambitious growth plans. Under Nardizzi, WWP aggressively solicited donations via direct mail and TV commercials.

In fiscal year 2010, the charity collected $40 million. The next year, it took in $70 million, followed by $148 million, $225 million and $313 million. By the end of 2015, WWP was raising more than $370 million a year, ranking 27th on Forbes list of the 100 largest U.S. charities.

Lavish spending

But the charity also began attracting criticism. Smaller veterans charities accused it of being a trademark- bully after it threatened to sue them if they used the term “wounded warrior.” Military leaders, concerned about recruiting efforts, reportedly bristled at some of the charity’s ads that showed soldiers with disfigured faces and missing limbs. Others accused it of wasting donor money.

In January 2016, exposés by CBS News and the New York Times described lavish spending on employee perks and parties. The most indelible image: A 2014 staff meeting, held at a five-star Colorado resort, where Nardizzi rappelled down the side of a building into a crowd of employees.

Non-profit rating group Charity Navigator put WWP on its watch list based on concerns that the charity spent too much on administration and fundraising costs.

Nardizzi, who made nearly $500,000 a year, defended the spending as part of an effort to foster a fun, entrepreneurial culture. Writing on Facebook, he argued that for non-profits to succeed, “they must be allowed to research, to advertise and, most important, to fail — in the same way that corporations like Apple and Nike do.”

New direction

In March 2016, the charity’s board fired Nardizzi and his COO. Several months later, it hired retired Army Lt. Gen. Mike Linnington as CEO, citing his military experience, including tours of duty in Afghanistan and Iraq, and “collaborative team-builder” approach.

During his last two years in the Army, Linnington helped oversee personnel policies and readiness reporting at the Pentagon. He regularly greeted troops returning from war at Andrews Air Force Base.

“In the back of the aircraft were service members with missing limbs, gunshot wounds and blast injuries,” he recalls. “Along the skin of the aircraft were young men and women coming back to be treated for some of what they’d seen and experienced in combat.” Many arrived wearing WWP gear, he points out.

After retiring from the Army, Linnington spent a year leading federal efforts to recover America’s missing in action as director of the Defense POW/MIA Accounting Agency. He says he made strides in turning around the agency, which had been falling short of its congressionally set goals for identifying MIA soldiers.

By the time Linnington joined the Wounded Warrior Project in 2016, donations were falling rapidly, ending the fiscal year 20% below the same period in 2015.

Linnington has moved aggressively to cut costs. During his first six months on the job, he reduced the charity’s executive staff by half, laid off 85 employees and closed 10 of 25 regional offices.

He also adjusted the charity’s travel and expense policies and shifted resources to sharpen its focus on mental and physical health.

The charity no longer offers vets help with finding tech-sector jobs or college prep courses, areas where they have other provider options, Linnington says.

His biggest challenge, however, has been restoring donor trust, the key to which, he believes, is transparency. “We had to be more efficient and effective, and we had to be more open and honest,” he says.

WWP plans to release its fiscal 2017 results next month. Because the reporting period will include October through December 2016 — the first “giving season” since the spending scandal — it’s expected to show another donation decline.

Meanwhile, Charity Navigator has upgraded WWP to a three-star rating (out of a possible four). It estimates that the charity spends about 74% of its budget on programs and services for veterans, with the rest going to fundraising (21%) and administrative costs (5%). Linnington himself earns $280,000 a year.

By comparison, the Navy SEAL Foundation, based in Virginia Beach, Va., spends 90% of its budget on programming, 4% on fundraising and 6% on overhead. Charity Navigator rates it four out of four stars.

The group considers charities with three stars as good and those with four stars exceptional.

Linnington points to three signs that WWP is turning things around: It’s hiring again and has no shortage of job applicants; about 1,500 new vets are signing up for its services each month; and donors are starting to come back, he says.

“I think it will be a several-year process to get back to where we were in 2015,” he says. “Trust is very hard to regain once you lose it.”

Fundraising costs eat up 21% of Wounded Warrior’s budget. “The only thing that allows us to scale — to meet the needs of 110,000 warriors a year — is the fact that we can generate support from the American people,” says CEO Mike Linnington. “If we don’t do a certain amount of fundraising on TV or in the mail, we don’t have the resources to provide for those we serve.”

 

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