Where Does $100 to Vietnam Veterans of America Go?

The Vietnam Veterans of America (VVA) is a 501 (c) (19) – an organization with past or present members of the armed forces (75% or more), that is exempt from federal income taxes. Donations are deductible as charitable contributions.  Based in Silver Spring, Maryland, VVA has 119 employees who “support a range of issues affecting Vietnam veterans and their families.”

According to the IRS Form 990 (2016) for the year beginning March 1, 2016 and ending February 28, 2017, VVA raised $8.7 million from the following sources:

• $2.8 million (32% of revenue):  Contributions, Gifts, and Grants
• $5.5 million (63% of revenue):  Sale of Goods
• $ .4 million (5% of revenue):  Advertising, Investment Income, Royalties
• $8.7 million (100% of revenue):  Total Revenue

Expenses totaled $8.3 million and can be viewed two ways:  by general category (Grants, Program, Management, and Fundraising) or by looking at specific expense categories (i.e. total compensation, grants, etc) with the later providing more detail.

Expenses by General Category

Expenses totaled $8.3 million (95% of revenue) and were spent as follows:

• $4.2 million (48% of revenue):  Program Expenses
• $1.8 million (21% of revenue):  Management Expenses
• $1.5 million (17% of revenue):  Grants
• $ .8 million (9% of revenue):  Fundraising
• $8.3 million (95% of revenue):  Total Expenses

Using the above information, $100 in revenue was spent as follows:

 $100:  Revenue

-$ 48:  Program Expenses

-$ 21:  Management Expenses

-$ 17:  Grants

-$  9:  Fundraising

-$ 95:  Total Expenses

$  5:  Revenue Remaining: To Fund Balance

As illustrated above, VVA spent $30 out of every $100 in revenue on management and fundraising leaving $65 for program and fundraising expenses and $5 for savings.

Expenses by Specific Expense Category

Expenses totaled $8.3 million in the following specific categories:

• $3.1 million (36% of revenue):  Compensation, Payroll Taxes
• $2.5 million (29% of revenue):  Office, Occupancy, IT, Temporary Help, Insurance, Training, Misc, Interest
• $1.5 million (17% of revenue):  Grants
• $ ,5 million (6% of revenue):  Travel
• $ .4 million (4% of revenue):  Fees for Services (no detail provided)
• $ .3 million (3% of revenue):  Fees for Services – Legal, Accounting, Fundraising
• $8.3 million (95% of revenue):  Total Expenses

Using the above information, $100 in revenue was spent as follows:

$100:  Revenue

-$ 36:  Compensation and Payroll Taxes

-$ 29:  Office, Occupancy, IT, Temporary Help, Insurance, training, Mic, Interest

-$ 17:  Grants

-$  6:  Travel

-$  4:  Fees for Services (no detail provided)

-$  3:  Fees for Services – Legal, Accounting, Fundraising

-$ 95:  Total Expenses

$  5:  Revenue Remaining:  To Fund Balance

As illustrated above, $65 out of every $100 is spent on staff compensation and office overhead while $7 is used for outside services and $6 for staff travel.  $17 out of every $100 is spent on grants with 37 recipients (all State Councils of the VVA) receiving more than $5,000 each for general support. The largest grant recipients were to ten (10) state chapters totaling $1.1 million (of the total $1.5 million in grants):

• $307,094:  California State Council (of VVA) – a 501 (c) (19)
• $147,894:  Maryland State Council (of VVA) – a 501 (c) (19)
• $112,252:  New York State Council (of VVA) – a 501 (c) (19)
• $ 94,980:  Illinois State Council
• $ 85,209:  Florida State Council
• $70,896:  New Mexico State Council
• $ 59,912:  Pennsylvania State Council
• $ 51,124:  Buckeye State Council
• $ 42,668:  Virginia State Council
• $ 42,032:  Minnesota State Council

According to the IRS Form 990, the VVA spends $4.2 million (or 48% of revenue) to distribute $1.5 million in grants to State Council offices – which does not seem very efficient.  There may be other programs but the form does not describe any other program services beyond the grant program to state offices.  Staff compensation totals $3.1 million for the 119 employees which equates to about $26,000 per staff member. Only 1 person receives more than $100,000 in compensation ($145,974 to Joseph Sternburg, CFO).  The President received $77,458 while the other 3 executives (VP, Secretary, and Treasurer) were each compensated $38,731.

The VVA primarily relies on two organizations for internet and email solicitations:

• Charity Funding of Rochester Hills,Michigan obtained $3.9 million in revenue and was compensated about $421,000 netting the VVA $3.5 million;
• Next Generation of Berwyn, Pennsylvania obtained $1.6 million in gross receipts and were compensated about $106,000 netting the VVA $1.5 million.

However, it is unclear what the cost basis of the conversions were and how they were determined because the amount raised is the net figure and not the gross figure (which would then have costs deducted).

So, the question becomes, what does VVA really do?  First, they collect and sell donated goods and raise funds primarily through two fundraisers.  Then, they take the funds realized from the sale of goods and contributions and do two things: they pay for the cost of running the VVA and award grants to State Councils (VVA).  The information on the 990 indicates the costs are high to covert the donated goods ($48 out of every $100 in revenue)and that only $17 out of every $100 in revenue is awarded in grants. On the positive side, executive compensation is low.

If you want your donation dollars to go further, you may want to consider giving directly to the local State Council of the VVA.