The way Steven Nardizzi tells it, he’s the sacrificial lamb of the Wounded Warrior Project, the major veterans charity that fired him as chief executive last month.
In an hourlong interview with the Chronicle, Mr. Nardizzi said the board had given him stellar performance reviews and had not raised concerns about his actions at the nonprofit prior to two media reports released in late January that rocked the organization, alleging it spent more on overhead than other veterans charities do and had splurged on conferences, travel, hotels, and parties. The news reports, which were released separately by CBS and The New York Times, also accused officials with the nonprofit of creating a toxic environment for employees, in which disloyalty was punished.
Furthermore, the reports described flamboyant displays by Mr. Nardizzi, including a much-repeated story of the former chief executive rappelling down a bell tower into the courtyard of the five-star Broadmoor hotel in Colorado Springs, a spotlight fixed on him. The scene was part of a multiday meeting for the nonprofit’s roughly 500 employees, who were all flown out to the hotel, according to the Times. The reports prompted the organization’s board to fire not just Mr. Nardizzi but also Al Giordano, the organization’s chief operating officer.
In the interview, Mr. Nardizzi said his dismissal came as a shock, adding that the board already knew much about what was happening at the nonprofit.
“I was certainly disappointed in the decision,” he said. “The board had been engaged heavily in all of the decision making of the organization. It reviewed every budget. They had come out to many of our program activities. We had board members at every one of those all-staff events that were the subject of some criticism, and they had been happy with my performance in the past.”
Updating Policies
Officials at the Wounded Warrior Project declined to respond to Mr. Nardizzi’s comments through a spokesman.
Mr. Nardizzi said he was even more displeased that the announcement of his firing overshadowed the release of the findings of an independent review of the media reports commissioned by the board of Wounded Warrior. The review, which was carried out by law firm Simpson Thacher & Bartlett and FTI Consulting, challenged certain facts in the news stories, including claims about spending on administrative overhead, travel, and conferences.
(The New York Times wrote that the review confirmed many of the allegations in its story and in the CBS report.) However, the release said that certain policies and controls had not kept pace with the growth of the nonprofit. It said Wounded Warrior was working to update polices concerning travel and expenses and explained that firing Mr. Nardizzi and Mr. Giordano — and bringing in new leadership — would be the best way to “effectuate” changes.
Mr. Nardizzi said he thinks the board was compelled to act because of the media reports and the criticism that followed. He said reporters were seeking comment from donors, sponsors, and those connected to the nonprofit, which put a lot of strain on the organization. Some donors said publicly they would no longer give to Wounded Warrior.
Coverage by the news media, Mr. Nardizzi said, certainly put significant pressure on the board of directors. He added: “By the time that that independent investigation was completed, the board really felt, at that point, a great deal of pressure to make some kind of a change in the hopes that the story would go away.
“And it looks like, clearly, that the story hasn’t gone away, here in the sector, and in the public eye.”
Public Image
Some critics are not persuaded by Mr. Nardizzi’s defense or that of Wounded Warrior, despite their claims that many of the media’s allegations were false.
Fred Kane, who formerly ran a nonprofit that raised money for Wounded Warrior, said he was not comforted by the fact that the price tag of the meeting at the Broadmoor hotel was later revealed by Wounded Warrior to be roughly $970,000, as opposed to $3 million, a figure that was in a CBS News report.
“Oh really? $1 million?” Mr. Kane said sarcastically. Mr. Kane said he spoke with Mr. Giordano after the CBS and New York Times reports appeared. “I said, ‘I don’t care what kind of deal you told me you got. It’s wrong. Period.’ "
Mr. Kane said the reports of first-class travel, large expenses on snacks, and other expensive perks are not in line with what people expect from a nonprofit.
Mr. Nardizzi said that economically the hotel was a good choice, as the organization received free convention space and a discount on food. But he conceded that he should have been more sensitive to how the event would look to the public.
“Certainly looking back I would have been more careful about the optics around some of our activities, some of my entrances, and even our choices of venue,” he said.
Unanswered Questions
Mr. Kane said that he was also unhappy that the organization was not as active as he would have liked in rebutting some of the media’s accusations.
Mr. Nardizzi agrees that too many questions were left unanswered following the release of the media reports.
After the news reports were released, he was instructed not to speak to journalists, he said.
“It was a mistake to not be more proactive in putting out answers,” Mr. Nardizzi said. “Of course, anytime you see that level of media inquiry, the public is curious about what’s going on, donors get curious and concerned about what’s going on.”
That’s part of the reason he has taken it upon himself to defend the charity since he was dismissed, he said. In March, Mr. Nardizzi and Mr. Giordano created a blog devoted to defending Wounded Warrior and their reputations. They also did television interviews, and wrote an opinion piece for Washington Examiner about their view of the controversy.
Mr. Nardizzi said his goal is to correct the record and make sure Wounded Warrior does not falter due to the allegations, he said.
Venting Frustrations
But some are not convinced Mr. Nardizzi’s actions will help much.
The blog and interviews may be a good way to vent frustrations, said Leslie Lenkowsky, a philanthropy expert at Indiana University and a Chronicle columnist, but he doubts it’ll be effective.
“It’s going to be a blip,” Mr. Lenkowsky said, noting that the public pays less attention to media reports and charity watchdogs then people at nonprofits think.
Mr. Nardizzi is undeterred, saying that, although he’s unsure what his plans are for the future, he wants to stay active in combating charity watchdogs and the media when they focus too much on overhead as a measure of a nonprofit’s effectiveness. He said too many nonprofits are unwilling to make investments to grow because of concerns about being criticized.
Defends Spending
Mr. Nardizzi said he also plans to continue his affiliation with the Charity Defense Council, which attacks media criticism of charities. Mr. Nardizzi serves on the steering committee of the defense council’s advisory board. The council was set up by Dan Pallotta, a vocal critic of charity watchdogs and media investigations of nonprofits.
The controversial group released a multipage defense of Wounded Warrior in March and is leading an effort to raise $25,000 to hire an investigative journalist to dig into the media reports that criticized Wounded Warrior. As of Friday morning, the effort had raised only $450.
Some see the council’s ties to Wounded Warrior as suspect. The council received a $150,000 grant from the charity, according to Wounded Warrior’s 2013 Form 990. That prompted Sen. Charles Grassley, Republican of Iowa, to ask Wounded Warrior and the Charity Defense Council to answer questions about the relationship.
Mr. Nardizzi and Mr. Giordano responded to Mr. Grassley’s inquires in a detailed piece published Friday by The Hill. The former executives repeated some of the findings made in the review ordered by the Wounded Warrior’s board, including that more than 80.6 percent was spent on programs by the nonprofit, rather than 60 percent, as was reported by the news outlets. Charity experts and others point out that the number cited by Wounded Warrior, however, includes things that donors may not consider programs, like advertising and promotional items.
Over all, Mr. Nardizzi said he would not have changed his actions in terms of spending significant sums on marketing and other fundraising costs — a subject that also drew criticism from the news media and donors — because the organization was able to help more veterans as a result.
“That couldn’t have been done without those investments,” he said.
But other charities may want to be more cautious, said Peter Frumkin, a professor at the University of Pennsylvania who directs its Nonprofit Leadership Program.
While some in the nonprofit world may believe that high fundraising costs should not be a concern, the public does not seem to believe that, Mr. Frumkin said, despite people like Mr. Pallotta passionately arguing for a change in people’s perceptions.
"[Mr. Nardizzi] assumed that’s the way it is now,” Mr. Frumkin said. “I think the reaction is that, no, people have still not bought in.”
