Steven Nardizzi, who was fired in March as chief executive of the Wounded Warrior Project, is criticizing his former organization again, slamming its trustees for what he calls a lack of honesty and openness concerning an allegedly dire financial situation.
What’s more, he says the group’s troubles have been compounded by the organization’s ineffective response to negative news-media stories about the group’s spending policies while he was running the charity.
In interviews with The Chronicle this week, Mr. Nardizzi said the organization has not been upfront about how steeply donations have dropped. He said he had been told by the organization’s new chief executive, retired Army Lt. Gen. Michael Linnington, in July that Wounded Warrior had projected that its revenue would fall to $185 million by the end of fiscal 2017. That’s less than half of the revenue reported on the organization’s latest tax Form 990, for 2015, which had total revenue at $398.7 million.
Officials at Wounded Warrior said Mr. Nardizzi’s figures were wrong but declined to provide an update on the organization’s actual donation levels for fiscal 2016, which closes at the end of September, or estimates for 2017.
Criticism and Denials
Mr. Nardizzi said it’s unclear whether Mr. Linnington was referring in conversation with him to the organization’s total revenue, which includes all donations and other income, including from investments and licensing royalties, or just contributions revenue, which would include money raised at events as well as support from individuals, corporations, and foundations — the vast majority of the organization’s income.
Either way, such a dramatic drop in funds would probably lead to massive layoffs and program cuts, Mr. Nardizzi says.
Mr. Nardizzi mostly put the blame for the drop in revenue on a negligent response by the organization’s trustees to media criticism. He said that donations mostly held steady shortly after The New York Times and CBS News released reports in January charging that Wounded Warrior spent fewer of its donations helping veterans than similar nonprofits did. The news organizations also alleged that Wounded Warrior splurged on conferences, travel, hotels, and parties and quoted employees saying the nonprofit had a toxic culture in which minor offenses or disloyalty were punished. Al Giordano, the organization’s chief operating officer, was fired along with Mr. Nardizzi following the news reports.
The organization’s board, Mr. Nardizzi, and Mr. Giordano denied most of the charges in the news reports. However, Mr. Nardizzi acknowledged that some of his flamboyant actions while chief executive were problematic, and created “optics” issues that opened the door to criticism and could have been partially responsible for the drop in donations.
The national news reports painted a picture of an organization in which unnecessary spending was rampant, including a description of a story in which Mr. Nardizzi rappelled down the side of a bell tower into the courtyard of the five-star Broadmoor hotel in Colorado Springs. The scene was part of the opening to a multiday conference that about 500 employees were flown to.
Mr. Nardizzi said Thursday he had no insight into where the organization’s donations now stand but said he thinks it’s likely that the charity will close fiscal 2016 next month well below what it raised in fiscal 2015.
A source with knowledge of the situation at Wounded Warrior, who asked not to be named, said that earlier this year people at the organization were saying the target for fiscal 2016 would be $280 million.
Disputed Discussion
Mr. Linnington acknowledged that he spoke to Mr. Nardizzi before he started at Wounded Warrior about “loss of revenues and projected revenue streams” but said the projected number Mr. Nardizzi provided is wrong.
Asked if the figure Mr. Nardizzi provided to The Chronicle was close to Wounded Warrior’s internal projection, he said he’d need to get permission from the organization’s trustees to disclose such figures.
The Chronicle’s request to speak with Anthony Odierno, the board chair, has not yet been returned.
The organization released a statement to The Chronicle saying that Mr. Nardizzi’s numbers were inaccurate and that it was still developing its budget for fiscal 2017, which starts in October. The nonprofit plans to present its budget for next year to its trustees at the end of September, the statement said.
The conversation concerning revenue occurred between Mr. Nardizzi and Mr. Linnington on July 6, according to Mr. Nardizzi, almost three weeks after Wounded Warrior announced that Mr. Linnington would replace Mr. Nardizzi but before Mr. Linnington started on July 18.
Mr. Nardizzi maintained that Mr. Linnington provided the figure and that the two had an hour-long “in-depth” conversation that touched on revenue and where the organization might make cuts if it needed to do so. He said Mr. Linnington seemed confident in sharing the number.
Mr. Linnington said that any revenue projection concerning Wounded Warrior’s upcoming fiscal year would be just that: a projection. Wounded Warrior’s fundraising could end up being much stronger than any such forecast, he said. “It could be $185 [million], it could $155, it could be $355. I mean we haven’t even started advertising. We haven’t started the new process with the new organization,” he said.
Mr. Nardizzi countered by saying that Wounded Warrior, at best, has outperformed budget estimates by about 10 percent or 15 percent but has not done any better than that.
He said it’s possible that the projection has changed since Mr. Linnington provided it to him, but in his experience as chief executive, such figures don’t fluctuate too much.
This is not the first time that Mr. Nardizzi has said the organization is in trouble. He told The Washington Post this month that he projected Wounded Warrior’s revenue would fall to about $200 million at the end of fiscal 2017.
Wounded Warrior officials have stated in prior interviews with The Chronicle that they’ve indeed seen a drop in donations.
Mr. Linnington said earlier this month that he and the organization would release information in September about a “restructuring” that would include an undisclosed number of layoffs and cuts to executive salaries.
