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January 21, 2019

Where Does $100 to the Vietnam Veterans of America Go?

by Anne Paddock

The Vietnam Veterans of America is a 501 (c) (3) whose core mission is to advocate on behalf of veterans to improve entitlement benefits and services for our veterans (not just Vietnam vets) by educating federal officials and their staff.  Although the VVA does other things (i.e. publishes a magazine, travels to Vietnam to bring home remains, posts book reviews, provides testimony, assists veterans with appeals, distributes information to the news media, etc), the organization’s staff appears to primarily be a “lobbying” group aimed at improving benefits and services for veterans.  Consequently, most revenue is spent to compensate staff, pay overhead costs, and support through grants local chapters of the VVA.

The IRS Form 990 (2017) reports the following key information about the VVA:

The VVA raised $9.9 million in 2017. The organization’s primary source of income is from the recycling program ($6.5 million or 66% of total revenue) which involves the collection of discarded household items and automobiles that are sold to private companies; and contributions ($2.7 million or 27% of total revenue).

The recycling program is coordinated through “Pick Up Please” in 13 states where potential donors contact Pick Up Please to donate household goods and/or automobiles. In 2017, the VVA collected $23.9 million in goods. After spending $17.4 million in sales expenses ($73 out of every $100 in donations), the VVA reaped $6.5 million. From a donor perspective, a donation of an automobile or household goods with a $1,000 value provided $270 to the VVA after accounting for pickup and sales expenses). These numbers indicate the private companies that buy the goods benefit more from the donation of household goods and automobiles than the VVA does.

The VVA spent $8.8 million (88% of revenue) in 2017 on:

  • $3.5 million (35% of revenue):  Compensation
  • $2.5 million (25% of revenue):  Office-related expenses
  • $1.3 million (13% of revenue):  Grants
  • $0.7 million (7% of revenue):  Fees for Services
  • $0.7 million (7% of revenue):  Travel and Conferences
  • $0.1 million (1% of revenue):  Other expenses (advertising, etc)

The $3.5 million in compensation was paid to 102 employees who received an average compensation of $34,300. One employee, Joseph Sternberg, the CFO, received more than $100,000 in compensation. He received $149,913.

The $2.5 million in office-related expenses were primarily occupancy, IT, office support costs, insurance, temporary help, and training.

Grants of $1.3 million were primarily to 30 State Councils of the VVA (501 c 19’s – veteran organizations) for general support.

The travel and conference fees – approximately $700,000 – were primarily travel-related and include the 22 day trip of the Veteran’s Initiative Team to Vietnam to “discuss the issue of recovering the remains of the war dead” and the delivery of 275 plaques, certificates, and medals to veterans.

Fees for Services – approximately $700,000 – were for professional fundraisers, legal, accounting, and other (no detail provided for $360,000).

Using the above information, the use of a $100 donation to the VVA depends on whether the donation was goods or cash. If the donation was goods, the $100 was spent as follows:

$100:  Donation of Goods

-$ 73:  Cost and Sales Expenses of selling goods

$ 27:  Revenue to VVA

-$  9:  Compensation

-$  7:  Office-related Expenses

-$  4:  Grants

-$  2:  Fees for Services

-$  2:  Travel and Conferences

-$ 24: Total Expenses

$   3:  Revenue Remaining:  To Net Fund Assets

If the donation was $100 in cash revenue, the money was spent as follows:

$100:  Revenue

-$ 35:  Compensation

-$ 25:  Office-related Expenses

-$ 13:  Grants

-$  7:  Fees for Services

-$  7:  Travel and Conferences

-$  1:  Other Expenses

-$ 88: Total Expenses

$  12: Revenue Remaining:  To Net Fund Assets

At year-end, the VVA had $13.1 million in net fund assets, up from $11.3 million at the beginning of the year. This increase is due to the $1.1 million in revenue not spent in 2017 and nearly $750,000 in net unrealizable gains on investments.

Bottom Line:  If you want to donate to this organization and your dollars to go further, make a cash donation as opposed to a donation of household goods and/or an auto.

To read the IRS Form 990 (2017), click here.

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