Where Does $100 to Help the Vets Go?
Just hearing the words “Help the Vets” makes many Americans open their wallets because we all know the VA is not meeting the needs of the men and women who have served our country, and we want to help. But, if you want your donor dollars to go further, don’t give donations to phone, mail, e-mail or other third-party solicitors on behalf of an organization (they take too big a cut), or to an organization called “Help the Vets” – a 501 (c) (3) based in Orlando, Florida that has one employee – Neil G Paulson, Sr who received total compensation of nearly $250,000 in 2016.
Help the Vets is overseen by a 6-member board of directors, of which 3 are related family members. Three directors have voting powers but only two are independent. Brian Paulson, the son of Neil G Paulson is a Director and Wayne Pauluk is the brother of Neil G Paulson, the President of the organization.
According to the IRS Form 990, “Help the Vets was established for the express purpose of improving the lives of severely injured and disabled US veterans, especially those who have served in combat in Iraq and Afghanistan.” They do this by obtaining hotel voucher donations, clothing and household donations and giving these items to veterans.
In 2016, Help the Vets reported total revenue of $19.6 million of which $11.8 million (60% of revenue) were non-cash contributions ($8.3 million in hotel vouchers and $3.5 million in clothing and household goods). Cash contributions totaled $7.8 million (which was primarily raised by outside fundraising firms) who kept $6.9 million, netting Help the Vets less than $1 million.
The three fundraising firms were:
- Courtesy Call of Las Vegas, Nevada raised $5.5 million and was compensated $5 million, netting Help the Vets $500,000.
- Direct Response Consulting of McLean, Virginia raised $1.2 million and was compensated nearly as much, netting Help the Vets about $18,000.
- Newport Creative Communications of Duxbury, Massachusetts raised about $601,000 and was compensated $711,000 (for fundraising counsel) costing Help the Vets $110,000.
Expenses for Help the Vets totaled $16.4 million (84% of revenue), of which $8.8 million were grants and other assistance to domestic organizations (hotel vouchers, clothing and household goods, etc) and (as stated above) $6.9 million was paid to fundraisers. If contributions are matched with grants and revenue raised by fundraisers with fundraiser fees, then we see the following:
Contributions – Grants
$11.8 millon: Non-cash contributions
$ 8.8 million: Grants (hotel vouchers, clothing and household goods, etc)
$ 3.0 million: Amount Not Used
Revenue – Fundraising Fees
$7.4 million: Revenue raised by fundraisers
$6.9 million: Fees paid to fundraisers
$0.5 million: Revenue to Help the Vets
$0.4 million: Revenue raised (not by paid fundraisers)
$0.9 million: Total Revenue to Help the Vets
The IRS Form 990 reports Help the Vets spent about $700,000 on administrative expenses including $246,000 to the President, $354,000 in other (unexplained) expenses with the remaining $100,000 on office, IT, legal, accounting, occupancy, bank charges, etc. If the $700,000 were deducted from the $900,000 of revenue, then $200,000 was left at year-end along with $3 million in inventories (and this matches with what is reported on the balance sheet).
If you donated hotel vouchers or clothing and household goods in 2016 to Help the Vets, they gave away $8.8 million of the $11.8 million they received (or 75% of what they received in non-cash contributions).
If you gave cash to one of the three fundraisers on behalf of Help the Vets, the fundraiser kept 93% of the cash contribution or $93 out of every $100, netting Help the Vets $7 out of every $100. Of the $900,000 raised in 2016, nearly $500,000 came from outside fundraisers. If you gave $100 directly to the organization, then $78 out of every $100 was used to pay the President’s compensation and all other expenses of the organization, $354,000 of which are not detailed. The remaining $22 was not used and is reflected in the organization’s assets at year-end.
Help the Vets netted $900,000 in actual revenue ($500,000 from fundraisers and $400,000 raised on their own) and spent $700,000 on running the organization including $246,000 for the President and $354,000 in unexplained expenses.
Of the six directors on the board, 3 are related and only 2 are independent with regards to voting.
To read the IRS Form 990 (2016) click here.