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December 9, 2015

Where Does $1 to Hope For The Warriors® Go?

by Anne Paddock

Hope For The Warriors® provides comprehensive support programs for service members, veterans, and military families that are focused on transition, health and wellness, peer engagement, and connections to community resources.

Hope For The Warriors® is a non-profit 501 (c) (3) founded by military wives whose programs serve post-9/11 active duty, National Guard, and reserve service members and veterans from all branches of the military. Programs also support the entire military family, families of the fallen, and military caregivers through:

  • Short-term financial assistance  (Critical Care Coordination)
  • Scholarships (Spouse/Caregiver Scholarships)
  • Outdoor adventures (sports tickets, hunting and fishing expeditions, sailing, skiing, and snowshoeing by partnering with corporate and non-profit outdoors groups (Outdoor Adventures)
  • Adaptive sports equipment (Team Hope for the Warriors)
  • Wishes – debt reduction, tools for a small business, auto payments, etc. – (A Warrior’s Wish)
  • Career transitioning assistance to wounded service members and their families (Above and Beyond)

The program coordinates the above along with health and wellness needs with casework assistance, referral, and programs supported by the military, government, community and other non-profits.

According to the IRS Form 990 (2014), Hope For The Warriors® raised $6 million, of which $5.9 million (98%) came from contributions, fundraisers, and campaigns. The remaining funds came from program service revenue. Nearly $0.7 million of the contributions were non-cash: primarily mattresses and fire socks but also equipment and supplies, tickets, food and beverages, securities, collectibles, and a vehicle, meaning $5.3 million in cash revenue was raised in 2014.

Functional expenses totaled $5.9 million of which nearly $1.2 million were non-cash expenses (grants to organizations, grants to individuals, and depreciation), leaving $4.7 million (89% of actual cash revenue) spent on cash expenses, of which $3.8 million was spent on functional expenses listed below:

  • $2.3 million (43% of cash revenue) for compensation, benefits, and payroll taxes for the 51 employees. The executive salaries (included in the figure above) were $117,817 for the President and CEO and $102,756 for the Executive VP (with the remaining 49 employees costing $2,079,427 or, on average, $42,437 each);
  • $599,476 (11%) for office, IT, occupancy, accounting, insurance, staff development, credit card fees,, dues, and subscriptions);
  • $373,152 (7%) for travel, conferences, conventions, and meetings;
  • $259,163 (5%) for other expenses (no detail provided);
  • $240,034 (5%) for advertising, promotion, and royalties; and
  • $19,214 for donated goods (purchased).

Collectively, these functional expenses ($3.8 million) represent 71% of revenue collected.

Hope For The Warriors® provided grants to both organizations and individuals.  Nearly a half million dollars in non-cash assistance was granted to the Department of the Navy in the form of statues memorializing and symbolizing the Iraq and Afghanistan wars. Hope For The Warriors® commissioned these two statues at a cost of $481,000 (and provided a separate $50,000 “royalty” payment to the sculptor “as an advance on revenue”), which would lead some donors to ask if the money would have been better spent on psychological services, training, or other assistance on a veteran which would have a lifelong effect on the veteran, his/her family, and the community in which he/she lives. That the money was raised over a period of years is insignificant because money spent is money spent and the question that donors ask is “how will my charitable dollars be spent?”

Nearly $1.6 million in grants were given to individuals of which $949,877 (18% of cash received) were cash grants and $619,300 were non-cash grants. The cash grants to individuals are summarized as follows:

  • $373,132 (7% of revenue) to 5 recipients for home furnishings and renovations
  • $218,097 (4% of revenue) to 244 recipients for food and rental assistance
  • $148,170 (3% of revenue) to 325 recipients for gifts and support
  • $116,813 (2% of revenue) to 306 recipients for travel assistance
  • $50,712 (1% of revenue) to 9 recipients for adaptive assistance equipment
  • $26,726 (0.5% of revenue) to 38 recipients for entertainment and respite
  • $12,000 (0.2% of revenue) to 7 recipients for scholarship
  • $3,467 (0.1% of revenue) to 9 recipients for moving
  • $760 to 1 recipient for a dog kennel

Non-cash grants of $619,300 to individuals (the same recipients as above) are summarized as follows:

  • $532,643 to 5 recipients for mattresses and other items
  • $48,547 to 38 recipients for tickets to basketball games, hunting and fishing trips
  • $31,327 to 306 recipients for donated equipment and donated food for MCM runners
  • $4,328 to 1 recipient for a fully furnished apartment for one week and a gift of golf clubs
  • $2,455 in gifts and gift cards for veterans and caregivers

In summation, Hope For The Warriors® collected $6 million in cash ($5.3 million) and non-cash contributions ($0.7 million) in 2014. The organization spent $4.7 million ($3.8 million on functional expenses and $0.9 million on grants) and gave $1.1 million in non-cash grants to organizations and individuals. Because they gave away more non-cash grants than non-cash contributions received, the net result was that “other assets” declined on their balance sheet but because they spent less cash ($4.7 million) than they received ($5.3 million), the liquid assets on their balance sheet increased. Overall, the net result left net assets or the fund balance virtually unchanged at $2.3 million at year-end but much more liquid because they replaced non-liquid assets with liquid assets.

From a cash flow standpoint, a $1 contribution to Hope For The Warriors® was spent as follows:

$1.00:  Contribution

-$0.43: Staff Compensation

-$0.11: Office, IT, Occupancy, Accounting, Insurance, Staff Development, etc.

-$0.07: Travel, Conferences, Conventions, and Meetings

-$0.05: Other expenses (no detail provided)

-$0.05: Advertising, Promotion, Royalties

-$0.71: Subtotal Functional Expenses

 $0.29: Amount Remaining

-$0.18: Cash grants to individuals

-$0.11:  Amount Remaining – to Balance Sheet in liquid assets (savings and cash)

It is important to point out that Hope For The Warriors® is staff intensive with care coordinators and others because of the nature of the organization: to assist post-9/11 active duty, National Guard, and reserve service members and veterans from all branches of the military. Based on the information on the 990, the services in 2014 tended to be more related to staff assistance than cash grants to the veterans and their families since 43 cents of every dollar was spent on staff compensation and only 18 cents of every dollar received was spent on cash grants to the veterans and their families while 28 cents was effectively spent on office, travel, conferences, advertising and other expenses.

To read the entire IRS Form 990 (2014), click here.

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