Wounded Warrior Lesson For Non-Profits

by Michael Keane

Recently, there were executives from The Wounded Warrior Project that were fired due to fiscal irresponsibility on expenses. A New York Times article link is here.  This issue is not new and continues to pop up in the non-profit area. One main reason why this type of thing happens is that the organizational non profit side of the mission sometimes gets clouded by the personal mission of wealth. When the two clash within an individual or organization, a mess is generally a result. Wounded Warrior has been caught up in that idea.

It takes a special skill to manage your personal wealth ambitions when the business you are in exists in the non-profit arena. There are some wonderful resources that can help you find what non-profit companies are spending on their salaries and expenses. There are also non-profits that handle the situation in a wonderful manner.

One  example is Movember. If you look at their overhead expenses, it is clear that the executives of this company bring the mission mindset to their own personal wealth ambition. Per a story in the Independent Record (link here), wages and earnings were $900,000+ on $23,000,000 in 2013. You will see that the CEO has a salary of $280,000+ for 2012. Another example mentioned in the story is the American Lung Association's CEO pay of $300,000 on $54,000,000 in revenue. When you look at Wounded Warrior Projects pay, you see nothing out of the ordinary. It's CEO makes $300,000+, which is fairly in line with its contemporaries.

But this scandal has brought to light some comments from the company that could show an opportunity for improvement. In a story written by Ryan Schuette from IVN (link here), a comment by the company saying that their salaries are comparative with the private sector is what stands out. This could show where the motivation of the executives existed when they made the mistake of spending the amounts that they did. Non-profits have many reasons for comparing themselves to the private sector. But pay and wages should not be one of them. This can create confusion at the individual level and the greed of private sector processes will show itself and catch the non-profit in trouble, like the way Wounded Warrior Project has shown. When you run a non-profit, you have to have a solid understanding of where the traps of private sector thought processes exist for your business. In the Wounded Warrior case, that did not happen.

It is disappointing that the executives at Wounded Warrior Project haven't fully discerned this. But it is also a great opportunity to improve and become better focused and successful. Being what the mission of the organization is, there is little doubt that improvement will come. This is just a bump in the road for Wounded Warrior.

Per disclosure, the author is a Marine Corps veteran. He is also a regular charity contributor to Movember.