Photo by: JUAN DALE BROWN/TREASURE COAST NEWSPAPERS. Dan Wagner, an Army veteran, collects money on the side of California Boulevard in November in Port St. Lucie of the Disabled Veterans Foundation based in Plantation. After Wagner says the foundation helped him when he had some problems, he now helps by collecting money for them. The foundation collected $266,132 in 2009 with expenses totaling $257,232.

By Joe Crankshaw

$1.70.
That’s likely about how much of Navy veteran Gilbert Hahn’s $10 donation went to help his fellow vets.

After receiving a letter asking for a donation, Hahn, an 88-year-old Stuart resident, gave the money to a group called the National Veterans Services Fund. But only 17 percent, or $1.4 million of the $8.4 million the organization spent in 2008, went to help veterans, according to the most recent information supplied by the Florida Department of Agriculture and Consumer Services and the group’s own Internal Revenue Service filings.

“This is an outrage,” said Hahn, a veteran of service on board the USS Hancock in the South Pacific during World War II. “I gave them a small donation and they are back asking me if I forgot them and wanting more. They should be exposed and stopped. They are just making a living off us veterans.”

Hahn’s experience is not unusual.

A Scripps Treasure Coast Newspapers survey of 121 organizations across the United States registered with the Florida Department of Agriculture and Consumer Services purporting to raise money in Florida for veterans or military-related charities shows that they reported raising a total $472 million, of which they spent $439 million. Of those total expenditures, 66 percent went to aid veterans and active duty military personnel or their families, according to data the groups reported to the IRS.

The percentage would only get a “D” rating from most of the groups that monitor charitable activity.

Don’t let the percentages fool you, a lot of the money isn’t going where you think.

Here are examples from some organizations’ federal tax forms:

Allied Veterans, a St. Augustine-based group offering help in a variety of areas, collected $403,042 in 2008, the last tax filing available from the state, but spent only $2,700 on programs for veterans. It spent $456,295 for “administrative expenses,” leaving it with a deficit that year of $55,953.

United American Patriots Inc. of Greensboro, N.C., raised $1,042,694 in 2009 but gave only $182,247 to its veterans programs that year. It spent $856,719 on fundraising.

National Veterans Services Fund Inc. of Darien, Conn., which solicits heavily in Florida and took Hahn’s donation, raised $8,836,794 via the internet and mail pleas, but gave only $1,484,964 to veterans in 2008, the last tax year on file with the state. It reported spending $6,537,425 for fundraising and $452,335 in administrative expenses.

“If the people knew what is going on, they wouldn’t donate. The donating public is being ripped off,” said Daniel Borochoff, president and founder of the watchdog group, American Institute of Philanthropy, which not only reports on formal filings by nonprofit organizations, but evaluates the reports to see if those groups are achieving their goals.

Borochoff said the proliferation of groups purporting to aid veterans, active duty personnel and their families has created an inefficient and wasteful situation where nonprofits are spending high percentages of money on the fundraising efforts that bring in those donations.

“We cannot afford to waste American charity money by spending it on fundraising,” he said.

William Arnold, a Vietnam-era veteran and active in veterans affairs in St. Lucie County, said he is horrified at how much donated money does not reach veterans.

“I know the donors have to be unaware of this,” said Arnold, retired assistant controller at Florida State University who also served in the State Comptroller’s Office.

There has been an explosion of veterans’ aid groups in the last few years because residents want to help, partially because of the ongoing wars in Iraq and Afghanistan, said Bennett Weiner, public affairs director for the Better Business Bureau’s Wise Giving Alliance.

“Unfortunately, that has attracted the more questionable element that has taken advantage of American generosity,” he said.

Weiner said the Better Business Bureau would like to see more than 65 percent of money collected going to the particular program the charity is supporting. Only 49 of 121 organizations registered with the state spent at least that much on their veterans programs.

To legally raise money in Florida, organizations must register with the Florida Department of Agriculture and Community Services and file IRS Form 990. A form 990 is the nonprofit report form equivalent to an individual Form 1040, which residents use to report all income and expenses.

But chartering as a nonprofit organization and registering with state and federal authorities does not ensure veterans and their families will benefit from any gift. It just means the proper paperwork has been filed.

And not all organizations collecting money in Florida have registered to do so.

Furthermore, it’s rare that state or federal officials actually look to see if a nonprofit veterans group is doing what it says it does.

Still, Weiner said, “just because there are some questionable actors in this field, it does not mean that all veterans organizations are not doing a good job. There are some that are and are providing vitally needed services.

“Unfortunately this puts the burden on the donor to verify who they are giving to and whether they are doing a good job, so they can decide before they make the gift.”

Examples of organizations Weiner said are doing a good job include:

Southeast Florida Honor Flight Inc. collected $75,609 in 2009 to fly World War II veterans to see the new World War II monument in Washington. It spent $40,726 and had $34,883 for its next flights in reserve.

“Every dollar we get goes to facilitate the mission of flying Florida veterans to see their World War II Memorial in Washington, D.C.,” said Mike Roberts, Honor Flight president. “Even the guardians who go on the trips with the veterans pay their own way and that is $400 each.”

Air Force Enlisted Village of Shalimar, raised $7,035,062 in 2008 and used $6,925,288 to help retired Air Force veterans or their spouses.

National Military Family Association of Alexandria, Va., raised $10,652,623 in 2008, the last tax year filed with the state, and spent $8,462,340 meeting a wide range of needs for both active duty and retired personnel.

Special Operations Warrior Foundation of Tampa, amassed $6,317,697 in 2008 and spent $2,081,908 to provide for unmet needs of wounded special operations warriors from all military services. It has $3,692,723 in reserve to care for new wounded warriors as they come in from the battlefields.

The most visible collection activities on the Treasure Coast have been by The Veterans Support Organization and The Disabled Veterans Foundation Corporation, which place individuals, dressed in camouflage clothing resembling uniforms, on street corners with canisters asking for money.

The Veterans Support Organization of Warwick, R.I., which has solicited donations on Treasure Coast street corners, raised $2,579,603 in 2009, spent $2,400,848, yet distributed only $1,473,310 to veterans, according to IRS forms. More than $927,000 went to administrative and fundraising expenses.

Disabled Veterans Foundation Corporation of Plantation provides housing for veterans and reported collecting $266,132 in 2009, and spending $257,232. The group’s website claims 71 percent of the funds go to veterans projects, but the group files its financial statement using the short form 990EZ, which does not itemize contributions and expenses. Officials with the organization did not answer repeated telephone calls to their headquarters.

Organizations raising less than $500,000 a year and having total assets less than $1.25 million are permitted to use the short form, but should be willing to supply all of their financial data, according to representatives of the national charity watchdog groups.

Because street corner solicitors are collecting handfuls of change or wads of bills, no one knows exactly how much money they raise.

The Veterans Council of Indian River County is so incensed about fundraising activities by the Disabled Veterans Association, a Parma, Ohio-based group, that all 17 member organizations are asking the county and city governments to ban them from soliciting on the street corners and at shopping centers in Indian River County. Council members are suspicious of where money the group collects is going.

“I confronted one of the solicitors, who was wearing battle dress, and asked him if he was a veteran. He finally admitted he wasn’t. They are an affront to real veterans,” said Retired Air Force Col. Martin Zickert, council second vice president.

Members also said some of the uniforms they’ve seen solicitors wearing are fakes.

“It should be illegal for anyone to solicit while seeming to be a veteran,” said Bill Migliore, 67, a retired Air Force veteran in Vero Beach.

Florida Secretary of State Corporation records show Disabled Veterans Association was granted nonprofit status in 1997. That status was revoked in 2001 because of failure to file annual reports. The organization is not listed with the Florida Department of Agriculture and Community Services as eligible to solicit money in Florida.

The organization filed its last IRS Form 990 in 2007. That form showed it had total revenue of $9.3 million, spent $380,701 on services for veterans, paid fundraisers $7,777,429 and had management costs of $63,192.

Zickert is chairing the effort to ban the solicitors. He hopes the movement will spread to other Florida counties.

The City of Stuart has already banned solicitors from standing in the medians of public roads to collect money.

Sgt. Martin Jacobson of the Stuart Police Department, said his department conducted an investigation into street solicitations by The Veterans Support Organization in 2009. He said the department found the uniformed collectors were hired from a local day labor service and received one-third of all they collected. He said few were military veterans.

Jacobson said the ban was a public safety issue, not a First Amendment issue, because the department learned that if the solicitors gave only $1 to veterans causes, they were within the law.

Mike Nakowicz, spokesman for The Veterans Support Organization, defended the use of solicitors wearing battle uniforms. He said the charity does not employ professional fundraisers, and that the men and women on the street are “…homeless/jobless individuals we are rehabilitating through our on-the-job work program.”

Stuart Police Chief Ed Morley said the Veterans Support Organization came back to the city in January 2010 to get a permit to solicit. He said he told them they would first have to show that the Florida Department of Transportation approved of their soliciting.

Justin Wells, South Florida Chapter manager for VSO in Oakland Park, said his organization isn’t disturbed by Stuart’s decision not to allow solicitors.

“They don’t let anyone solicit,” he said.

He said the organization only keeps statewide figures for collections, but that much of the money collected in South Florida goes to support a 100-bed housing facility for homeless veterans.

In spite of opposition from groups such as Indian River veterans, solicitors are still appearing on the streets.

“It is easy for some people to take advantage of the veteran and first responder groups (police or fire charities),” said Michel Nilsen of the Association for Fund Raising Professionals, “and take advantage of the public’s generosity. (Fund solicitors) will come up with arrangements where they take 70, 80 or 90 percent of the money raised. It is not uncommon that some charities end up with less than 10 percent. It is sad, but we have court rulings that say fundraising is a free speech issue which cannot be regulated.”

The American Institute of Philanthropy’s Borochoff also blames veterans groups for many of the costs of raising money. In appearances before the House Committee on Governmental Reform in 2007 and 2008, he told the committee that some veterans groups sign contracts agreeing to pay much of what is collected because they feel they don’t have the time or ability to raise the money themselves.

Nothing resulted from the hearings in 2007 and 2008 and no state legislature has enacted any legislation that can control the solicitation of money and its high costs.

That leaves the onus on potential donors.

Borochoff said people who are solicited for money should carefully examine the organization. Of special importance is the ratio of fundraising costs to money paid for program benefits. He said much fundraising is done by professional solicitors interested only in a high commission for their work.

“It behooves the donor to ask these tough questions,” Nilsen said. “Unless people start complaining, take good notes about who is on the line, what they say, and start demanding responsibility, it will not get better.

“You don’t have to give immediately. You can look at alternatives. There are a lot of people who will look at all the options, but when a charity calls, they don’t even look. It’s like Bam! Give!”