CEO of veterans charity pursued ‘spend big' style
After 2 execs are fired, founder offers to return
It also led to his downfall.
A lawyer who never served in the military, Nardizzi arrived at the Wounded Warrior Project in 2006 after nearly a decade at the Eastern Paralyzed Veterans Association.
By 2010, Nardizzi had replaced founder John Melia as CEO and catapulted the nonprofit into the top ranks of U.S. charities. His success led to lavish spending — the group's annual staff meeting in 2014 cost $970,000 — prompting complaints from employees, veterans and charity watchdogs about profiteering off veterans.
On Thursday, Nardizzi and Chief Operating Officer Al Giordano were fired, the board said.
Melia, a former Marine, launched the group in 2003 after he was injured in a helicopter crash off Somalia. His exit left him bitter. He said Nardizzi erased his contributions from the group's website. He said Friday that he has requested an “immediate” meeting with the board of directors and is open to leading the group again.
Board Chairman Anthony Odierno, overseeing the charity on an interim basis, did not respond Friday to a request for comment. Neither did the fired executives.
The Wounded Warrior Project's directors fired the two executives after hiring outside legal counsel and forensic accounting consultants to conduct an independent review of the Jacksonville, Fla.-based organization's records and interview current and former employees.
The group's 2014 meeting, at a five-star hotel where Nardizzi rappelled from a tower into a crowd of employees, was particularly costly. The board's statement — released late Thursday by the crisis management firm Abernathy MacGregor — said “such events will be curtailed in the future.”
“An entrepreneurial spirit led to WWP's success,” Nardizzi wrote Jan. 18 on his Facebook page. “If nonprofits are going to be effective in their world-changing work (eliminating disease or eradicating poverty), they must be allowed to research, to advertise, and, most important, to fail — in the same way that corporations like Apple and Nike do. We need to embrace the notion that has long guided the for-profit world: think big, and often spend big, in order to succeed big.”
According to Internal Revenue Service reports, the charity took in $800 million over the last six years, while paying some of the highest salaries at major nonprofits. Nardizzi earned $496,415 annually and Giordano $397,329, while at least 10 others took in more than $160,000 each for the year ending in September 2014.
Compensation accounted for $32 million, or 13 percent of the group's spending that year.
“Many donors have supported the WWP from its humble inception and have every right to be angry about the lack of stewardship shown by the immediate past leadership of WWP,” Melia said in a statement.
The group's statement said its most recent audited financial statement shows 81 percent of donations was spent on “programming.” The statement cited a “joint allocation” accounting rule that enables nonprofits to classify fundraising as a service to clients if the event or material also is “educational” and includes a “call to action” beyond simply appealing for money.
Invoking that rule, the nonprofit reported to the IRS that it spent $26 million, about 10 percent of its budget, on conferences and events between Oct. 1, 2013, and Sept. 30, 2014. The statement said about 94 percent of that “was associated with program services delivered to Wounded Warriors and their families.”
The IRS filings said 76 percent of the budget, or $189,558,100, went to veterans programs — a share charity watchdogs would consider respectable. However, almost $41 million of that amount was claimed as the “educational” component of fundraising requests; without it, helping veterans accounted for just 60 percent of the budget.
CharityWatch.org says Wounded Warrior Project spent just 54 percent on programs rather than overhead, for a C rating.
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