Michael S. Linnington, a retired lieutenant general, has been tapped to head Wounded Warrior Project, the high-profile veterans support group that ousted its chief executive officer and chief operating officer this past March after news reports alleging inappropriate use of funds.
Interim Chief Operating Officer Major General Charlie Fletcher will remain with the organization during a transition period. The WWP also announced that it expects to add up to four members to the board by the end of the year.
Linnington joins WWP from the Defense POW/MIA Accounting Agency (DPAA), where Secretary of Defense Ash Carter appointed him director in 2015. His 35-year military career includes three tours in combat operations and command positions in numerous assignments around the world.
Linnington will oversee the organization’s day-to-day operations and set the strategic vision to guide the organization. He will be based at WWP’s headquarters in Jacksonville, Fla., and will report to the board of directors.
“Mike’s extensive military experience and proven leadership credentials make him the perfect candidate to lead WWP,” said Anthony Odierno, chairman of the WWP board of directors. “Mike understands the unique needs of our nation’s veteran community, is a collaborative team-builder, and is deeply committed to fulfilling our mission of honoring and empowering Wounded Warriors,” he said.
“I have long held the utmost respect and appreciation for Wounded Warrior Project’s vital mission, and I am excited to join them as CEO,” said Linnington. “When our wounded veterans return home from combat, they rely on WWP and the organization’s dedicated team to provide necessary physical and mental health services, as well as economic empowerment and engagement programs that make a meaningful impact on their lives, and the lives of their families and caregivers,” he said in a press release.
The organization fired both Chief Executive Officer Steven Nardizzi and Chief Operating Officer Al Giordano on March 10. The move came six weeks after intense media scrutiny regarding the charity’s spending and personnel policies.
WWP’s board determined the organization would benefit from new leadership, to best effectuate some policy changes and “help restore trust in the organization among all the constituencies” it serves. An Office of the CEO was created to oversee the organization on an interim basis led by Odierno.
The board hired Simpson Thacher & Bartlett as external legal counsel and FTI Consulting as forensic accounting consultants to conduct an “independent and objective review of allegations” reported by CBS News and The New York Times in January. The work included a review of financial and other records, interviews with former and current employees at all levels of the organization, including senior management and board members.
The review found that some policies, procedures and controls “have not kept pace with the organization’s rapid growth and are in need of strengthening.” The board will do another one with an external auditor, according to a source. Employee travel policies will more explicitly limit domestic air travel to economy class, with exceptions for health or disability. Policies related to employee and director expenses will be strengthened, the organization said, in addition to enhancing employee training on existing and new policies and procedures, and continuing to have financial statement independently audited and available on its website.
Nardizzi also serves on the steering committee of the Charity Defense Council (CDC). The Topsfield, Mass.-based CDC was founded by Dan Pallotta to act as an “anti-defamation league” of sorts for the nonprofit sector. The fledgling organization, which received a $150,000 grant last year from Wounded Warrior Project, recently hired its first two full-time staff members. Pallotta and Nardizzi have taken to the Internet to defend the management and fundraising practices, pointing out that many of the consumer media stories were incorrect and that the reporters did not know how to correctly read a federal Form 990.
Nardizzi’s flamboyant nature of riding into conferences on a horse or Segway and rappelling down a building raised the ire of some former employees who talked to CBS News. The reports cited $26 million from WWP’s tax Form 990 as having been spent on conferences. That was among some inaccuracies disputed by the charity.
WWP has been among the fastest-growing nonprofits in the country in recent years after aggressively investing in fundraising. Wounded Warrior Project reported total revenue of $342 million in its most recent fiscal year — compared with $74 million just five years ago — and has grown to more than 500 employees. It ranked No. 45 on last year’s NPT 100, a study by The NonProfit Times of the nation’s largest nonprofits that generate at least 10 percent of revenue from public support.
Sources said Wounded Warrior spent millions on Direct Response Television (DRTV) last year. It’s unclear how much revenue that spending yielded but Wounded Warrior raised huge amounts via DRTV, as well as online advertising and direct mail, soliciting monthly givers.
The plan was to raise $1 billion to fund future needs of veterans, with $500 million to be raised during the next five years and $500 million from investment earnings over a 20-year period. It’s placed almost $40 million toward its Long-Term Support Trust in the past two years.
At issue is just how much of its donations WWP spends on programs. The charity calculates program costs at almost 81 percent, per its audited financial statements, while other calculations put it closer to 60 percent if joint cost allocation (SOP 98-2) are disregarded.
In the statement from WWP, the organization disputed parts of the media reports:
- Approximately 94 percent, or $24.4 million, of the $26 million reported spent on conferences and events in the tax Form 990 was “associated with program services delivered to wounded warriors and their families.” A source close to the organization said that between $22 million and $24 million of that total was for an initiative called Project Odyssey. The program is like group therapy where wounded warriors from around the country get together to work out their issues.
- Less than 1 percent of air travel may have been booked for employee travel in first or business class but the vast majority has been in economy class.
- The cost of the “all-hands” held in 2014 at The Broadmoor, a luxury resort in Colorado Springs, Colo., was approximately $970,000, compared with the $3 million cited by media reports. “Such events will be curtailed in the future,” the statement said.
- From 2013 to 2015, employees made more than 150,000 “outreach calls” and sent more than 114,000 “outreach emails” to wounded warriors, disputing the allegation that “We don’t call warriors, warriors call us,” which was reported amid the allegations.