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Nonprofit Ethical Case:
WOUNDED WARRIOR PROJECT: Using Veteran Pain for Executive GainAlexa DavidsonValdeir Faria
NPA 601: NONPROFIT ETHICAL LEADERSHIPFall/ 2017Prof. Marco Tavanti. Ph.D
Introduction
• BackgroundandOverview• Video• Adualisticpresentationofthe“facts”
• Spending• Astrongfor-profitstructureandmetrics• Leadership
• ResponsibilityAnalysis• Questions
VideoIntroduction
CNNWoundedWarriorProjectExposé
Summary• InJanuaryof2016,theWoundedWarriorProject(WWP)becameheadlinenews
withtheallegationsofimproperhandlingofitsfinancialresources.
• BecausemilitaryserviceisconsideredoneofthehighestformsofpublicserviceintheUnitedStates,publicresentmentandoutragequicklygrew.
• Manydisgruntledpastemployeescameforwardinvariousmediapublicationsmakingallegationsof:
– lavishspending
– coerciveleadership
– wrongfultermination
– lowprogramqualityduetohighproductivitystandards
TheMedia’sRoleintheControversy
• ThemediacreatedthenarrativethatWWPwascapitalizingonveteranpain
• Publicationshighlightedpastemployeestories(mostofwhomwerewoundedwarriorsthemselves)andutilizedthesestoriesasfacts,potentiallyignoringvitalinformationforthesakeofagoodstory
• Numerouscrediblesources(nonprofitmanagementprofessors,nonprofitexecutives,etc.offeredalternativeviewpointsonthecontroversy)attributingthescandaltoprevailing/outdatedbeliefsregardinghowthenonprofitshouldoperate
UnpackingthisCase
• Takingaholisticapproachtostudyingthiscase,wewillconsiderboththefactspresentedbythemediaandalternativeviewpoints.
• Throughthislenswewillfurtherexaminethree“problemareas”:
– Spending
– Focusonmetrics
– Leadershipstyle
Spending
TheFacts:Examiningthe990’s2007 2010 2014 2016
TotalRevenue $18,634,714 $40,943,594 $234,682,943 $321,807,428
Conferences,conventions,andmeetings
$0 $1,700,000 $26,054,368 $2,120,004
Travel 1,221,849 $1,907,895 $7,492,655 $4,412,955
Fundraising $2,061,000 $9,393,128 $43,441,173 $69,367,589
PrevailingBeliefs:FundraisingOverhead
DiscussionQuestion:WhataretheprevailingbeliefssurroundingFundraisingOverhead?TEDTALK,DanPallotta
Consideringthealternativeviewpoint2007 2010 2014 2016
TotalRevenue $18,634,714 $40,943,594 $234,682,943 $321,807,428
Conferences,conventions,andmeetings
$0 $1,700,000 $26,054,368 $2,120,004
Travel 1,221,849 $1,907,895 $7,492,655 $4,412,955
Fundraising $2,061,000 $9,393,128 $43,441,173 $69,367,589
For-profitstructureandafocusonmetrics
• WoundedWarriorProjectexecutivesusedatatomeasurestaffproductivity.
• Themetricsareintendedimproveefficiencyandhelpfundraising.
• Somestaffasserthoweverthatproductivitygoalsaresettoohighandprogramqualityhaseroded.
MetricsandProgramEffectiveness
• TheWarriors-to-Work programisdesignedtoprovideone-on-onecounselingtoimproverésumésandinterviewskillsinordertohelpveteransfindemployment.
• Connectionprogramsaredesignedtoprovidetherapeuticandsocialeventsforveteranstocometogetherandenjoyeventsintheircommunities.
PrevailingBeliefs
Thepublicexpectsnonprofitstodeliveronservices,whichisagoodthing!Veteranservicesareacompetitiveareaofthenonprofitsector.DeliveringhighmetricskeptWWPcompetitiveandprovidedthepublicproofofservicedelivery.
• WWPreportsahighnumberofveterans• Employeesandthemediareportadecreaseinprogramquality
Whodoyoubelieve?
Leadership
• WWPhasastrictstancetowardsemployeesconsidereddisloyalorunproductive
• Eighteenformeremployees(manywhoareveterans)claimedtheyhadfiredformisstepsthatwerecategorizedasinsubordination.
• ManyclaimedthatwhentheyraisedquestionsregardingWWPpractices,thattheywerepromptlyfiredforbeingdisloyal
AlternativeView:EmployeeTermination
• ProfessorDougWhite- formerDirectoroftheMastersofScienceinFundraisingManagementProgramatColumbiaUniversity- createdacomprehensivereportquestioningthemedia’sreportonWWP’sfiringpractices
– EmployeeswerepartofaFacebookgroupwheretheycollaboratedwiththeintentionofdelegitimizingWWP
– NowrongfulterminationsuitswerefiledwiththeAGortheEEOC
ResponsibilityAnalysis
Consideringthedualviewpointspresentedinthiscasestudy,wewillexamine:
• IndividualResponsibility• OrganizationalResponsibility• SystemicResponsibility
First:Werethereissuesofcompliance?
• Ontheir990’s,WWPreportstheexistenceofaWhistleblowerPolicyintendedtoprotectemployeeswhoreportortakeissuewithcompanypractices.– Accordingtopersonalreport,employeeswerefiredforquestioningexecutive’sdecisions.
• WWPclaimsthatsomeemployeeswhoclaimedwrongfulterminationwerenon-compliantinregardstofinancialandcompanypolicies(makingtheirterminationcredible).
IndividualResponsibility• Leadership:
–Ifdisloyaltyandinsubordinationwererealandvalidcausesoftermination,executiveandprogramleadershiphadanindividualresponsibilitytocreateanenvironmentwhereloyaltywasbred.
–Challengesandconcernsshouldhavebeenwelcomedandaddressedbyimmediatesupervisorsandrunupthechainofcommand.
•Spending:–CEOSteveNardizzineededtoprioritizemissionactivitiesoverretreats,conferences,bar-tabs(?)
•Metrics:–CEOSteveNardizzineedstofindotherwaysmeasuretheimpactandreassessproductivitystandardsastheystartedtoaffectprogramquality
OrganizationalResponsibility:BoardofDirectors
• BoardofDirectors:TheBoardisresponsibleforapprovingthebudgetrelatedtofundraising,travel,conferences,etc.– TheBoardneededtodiligentlyinvestigatecomparableorganizationsinordertotodeterminethebudgetfortheabovecategories.
– IftheBoardfeltthatCEOSteveNardizziwasimproperlyusingfunds,theyareinchargeofinvestigating.
•Leadershipandemployeesneededtobemadeawareofthewhistleblowerpolicyanditneededtobehonored
SystemicResponsibility• Beliefssurroundingnonprofitsectorexpectationsandpracticesareindispute.
• Asasector,manyaremovingtoafor-profitmodel,likeWWP–Theyprovedsuccessfulinincreasingtheirdonationsandrevenuebydoingso
•Thepublicisveryadversetopeoplemakingmoneyoffofotherspain,sowhenscandalbrokeregarding“lavishandwasteful”spendingtheorganizationwascrucified.
•Thesystemicbeliefsdiscouragehighoverheadandspending,evenifrevenuequadruplesovertime,givingmorefundstomissionactivities.
•Thesectorischangingbutthepublic’sexpectationsarenot.
StakeholdersAnalysis• Veteran’sreceivedalowerqualityofserviceduetometrics.• Organizationalstaff(oftenveterans),werehiredbyWWPandthenfiredforquestioningauthority.
• Veteranpainwasusedforcorporategain,furtherinvalidatinganddevaluingtheirexperiencesaswoundedwarriors.
• Accusationsofmisuseofdonordollarswilldecreasedonationsinthefuture,ultimatelyaffectingveterans.
• CorporateSocialResponsibilitysuggeststhatscandalwithinoneorganizationaffectsthepublic’strustofthenonprofitsectorasawhole,meaningthatwholesectorwillbeaffectedbythiscontroversy,inparticularveteranscharityorganizations.
SoWhatHappened?
• Afterthescandalbroke,theboardfiredCEOSteveNardizziandCOOAlGiordano.
• WWPhadathirdpartyexaminetheirfinancesandarguedthattheyhavealwaysbeentransparentontheirtaxforms.
• SenatorChuckGrassley’sofficeconductedaninvestigationofWWP• WWPheldnumerouspressconferencesdefendingtheirpractices,anddefendedthemselvesagainstspecificremarksmadebyCBSandtheNewYorkTimes.
• Changesinspendingpracticesaretobeseenonthecomingyears990taxform.
Questions1) Whatwasthemedia’sroleinthiscase?2) Giventhatdisloyaltyandinsubordinationwereconsistentproblemsthat
ledtoemployeetermination,whatleadershipstyle(s)couldhavebeenusedtocreateanenvironment/culturethatbredloyaltyandintegrity?
3) Otherthanmetrics,whatarewaysthattheorganizationcouldhavemeasuredimpactandensuredqualityprogramsandservices?
4) Aftersuchapublicscandal,shouldtheboardreevaluateitselfanditseffectiveness?Shoulditconsiderachangeofmembershipandofficers?
5) WhattypeofaccountabilitycantheboardinstituteamongsteachotherandthenextCEO?
6) Doesthereneedtobeashiftinbeliefssurroundinghownonprofitorganizationsshouldbebehaveandoperate?Whatarethecostsandbenefitsofshiftingtoamorefor-profitmodel?
Resources
•JimCollins,authorofGoodtoGreatandtheSocialSectors,leadershiparticles.
•DanPallotta,TEDTalk‘Thewaywethinkaboutcharityisdeadwrong’•SimonSinek,TEDTalk‘Whygoodleadersmakesyoufeelsafe’•Lin-Hi,N.,Hörisch,J.,&Blumberg,I.(2015).DoesCSRMatterforNonprofitOrganizations? - AlternativeLink
ReferencesChasmar, J. (2016, January 27). Wounded Warrior Project accused of wasting donor money: 'It just makes me sick'. Retrieved October 10, 2017 from Washington Times Web site: http://www.washingtontimes.com/news/2016/jan/27/wounded-warrior-project-accused-of-wasting-donor-m/Chasmar, J. (2016, January 28). Wounded Warrior Project demands CBS News retract 'absurd and patently false' spending report . Retrieved October 10, 2017 from The Washington Times Web Site: http://www.washingtontimes.com/news/2016/jan/28/wounded-warrior-project-demands-cbs-news-retract-a/Fox News. (2016, March 10). Wounded Warrior Project's top execs fired amid lavish spending scandal. Retrieved October 10 , 2017 from Fox News U.S. Web Site: http://www.foxnews.com/us/2016/03/10/wounded-warrior-project-reportedly-fires-top-executives-amid-spending-controversy.htmlGroden, C. (2016, March 11). Wounded Warrior Project Sacks Two Executives Over Spending Scandal. Retrieved October 10, 2017 from Fortune Web Site: http://fortune.com/2016/03/11/wounded-warriors-project/IRS. (2016, October 10). Form 990. IRS.McCambridge, R. (2017, May 25). Senate Committee Finds Past Misrepresentation of Finances at Wounded Warrior Project. Retrieved October 20, 2017 from Nonprofit Quaterly Website: https://nonprofitquarterly.org/2017/05/25/senate-committee-finds-misrepresentation-of-finances-at-wounded-warrior-project/Philipps, D. (2016, January 27). Wounded Warrior Project Spends Lavishly on Itself, Insiders Say. Retrieved October 10, 2017 from The New York Times: https://www.nytimes.com/2016/01/28/us/wounded-warrior-project-spends-lavishly-on-itself-ex-employees-say.htmlReid, C., & Janisch, J. (2016, January 26). Wounded Warrior Project accused of wasting donation money. From CBS News: https://www.cbsnews.com/news/wounded-warrior-project-accused-of-wasting-donation-money/Team FME. (n.d.). Leadership Theories, Leadership Skills. From Free Management Ebooks: www.free-management-ebooks.comThe Wounded Warrior Project. (2016, January 26). Wounded Warrior Project accused of wasting donation money. Retrieved October 10, 2017 from Wounded Warrior Project Web site: https://www.cbsnews.com/news/wounded-warrior-project-accused-of-wasting-donation-money/White, D. (2016). The First Casualty: A Report Addressing The Allegations Made Against The Wounded Warrior Project In January 2016. Self Published.Wounded Warrior Project. (n.d.). Programs. From Wounded Warrior Project website: https://www.woundedwarriorproject.org/programs
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