In the fight to help veterans, New York City nonprofits face unique challenges

As New York City Council members stamped their approval on an $82.1 billion budget last month, a line item granting $514,000 to coordinate services for military veterans garnered little attention.

Even though the half-million-dollar allotment for the newly-minted Department of Veterans’ Services amounts to a fraction of one percent of the city’s budget, Dr. Nick Armstrong noticed, to him, the money serves as a six-figure validation of his team’s research at Syracuse University’s Institute for Veterans and Military Families.

Armstrong’s institute – which he prefers to call an “action tank” – is responsible for a series of projects across the country, under the umbrella “America Serves,” which guides veterans and their families toward resources that are often difficult to find in major metropolitan areas. Their local NYServes initiative was set to expire on June 30, but the new infusion of funding will allow the project to continue.

The mayor’s office said it plans to rebrand and expand NYServes as VetConnect NYC. The city-owned, digital case management portal aims to connect the city’s 225,000 veterans and their families with a full range of resources from over 60 health and human services providers.

“This annual funding will help us expand services to further address the needs of members of the armed services, veterans and military families,” a representative for Mayor Bill de Blasio said via email.

There are many resources for veterans – an estimated 42,035 nonprofits focus on the veteran and military community nationally, including more than 1,883 veterans nonprofits in New York state, according to the Center for a New American Security.

However, Armstrong said, veterans and their families are often lost as to how they can take advantage of what’s available.

“It's not that there isn't enough capacity or enough services out there. It's helping veterans understand and know where to turn to really navigate this sea of different resources and care,” Armstrong said. “What we're finding from the research is that navigation is the biggest challenge.”

While finding the right services might be the primary challenge for a veteran in need, there are a dizzying array of systemic challenges facing veterans nonprofits themselves. In a series of interviews, researchers and industry watchdogs described a unique set of challenges facing those nonprofits.

Veterans nonprofits often struggle with fundraising, but that’s only the beginning. Delivering those resources to the people who need them poses a whole new challenge.

Funding from a so-called “sea of goodwill,” fed by patriotic support for veterans in the post-9/11 wars in Iraq and Afghanistan, may be drying up. According to a 2015 report by the Center for a New American Security, “the future does not look bright for either of the two primary sources of funding – government funding and philanthropic giving – flowing into this sector.”

Nationwide, assets and revenue for veterans groups remained relatively flat for the previous 14 years, the study noted. Meanwhile, “the need within the veteran and military community has grown, as measured by nearly every metric available,” the study found, citing service provider surveys as well as federal Veterans Affairs and Defense Department data.

Despite the study’s gloomy fiscal forecast, veterans charities have a distinct fundraising advantage, said James Sheehan, chief of the charities bureau at the New York attorney general’s office.

“Certain kinds of charities are what we call ‘warm glow charities,’” Sheehan said, placing veterans, cancer, children, and animal charities in that group. “People have a strong emotional bond with them and they feel better about themselves when they contribute,” he explained.

In short, Sheehan said, “If I'm a fundraiser and I want to really collect lots of money, the veterans category is going to be one I'll be inclined to enter.”

Unfortunately, the lure of easily-earned fundraising dollars is a draw for unscrupulous operators. From his law enforcement perspective, Sheehan said, that’s why those charities also receive special scrutiny from his office. As a result, honest veterans groups – especially smaller or less experienced ones – should beware.

Veterans groups have consistently been preyed on by fundraising outfits that lock naive nonprofits into contracts, effectively enslaving them to the fundraiser. “It was like corporate peonage,” said Sheehan. “You never got out of debt.”

More commonly, however, fundraisers will simply claim the lion’s share of the donations they collect in the nonprofit’s name. Underfunded nonprofits in this competitive sector are often tempted to take the deal, even for pennies on the dollar, reasoning that those are pennies they wouldn’t have collected otherwise.

“I don't think that's a justifiable argument,” said Sandra Miniutti, chief financial officer at Charity Navigator, which evaluates charities based on financial health, transparency and accountability. “That's money that could have gone to a more efficient, impactful charity that just got wasted. And then when donors find out, they're understandably outraged and they don't want to give at all to any charity after that.”

Another issue facing veterans groups has been a flurry of unflattering media attention on veteran’s nonprofits over the last few months – including exposés detailing scandalous spending at the Wounded Warrior Project and some questionable veteran’s charity choices by presumptive Republican presidential nominee Donald Trump.

But there are lessons to be gleaned from both stories, said Daniel Borochoff, president of charity watchdog group CharityWatch.

“It's teachable beyond Trump, beyond the presidential politics,” Borochoff said. “How did someone pick these groups? What actually is going on with these groups?” Whether you’re a donor deciding which group to give to or a nonprofit looking to partner with a local veterans group, Borochoff explained, you need to do your homework. “Get specifics,” he said. That way, “you're not giving to a nebulous cause, you're giving to a specific programs that are really helpful or useful.”

And the splashy scandal surrounding the Wounded Warrior Project? Borochoff said many groups are a lot worse.

Wounded Warrior runs several programs benefitting veterans and their families directly, as opposed to less reputable groups that siphon off funds to outside groups or simply perform questionable services, like distributing arts and crafts supplies.

“The biggest problem with (the Wounded Warrior Project) is they were wanting to not spend their money and accumulate it so rapidly,” Borochoff explained. “Warchesting,” as such cash stockpiling is called, was also noted as a growing trend in the Center for a New American Security report. “If they had spent more of their money on programs, they would have looked pretty good – other than their lavish spending,” Borochoff added.

Despite the long list of challenges in the sector, Miniutti insisted that there are many veterans groups doing good work. “There are great charities out there – they’re not all bad,” she said. “But you do need the time to help determine that and not just give because somebody asks.”

In today’s fundraising climate, that depends on what you can show, Miniutti said. “I think it’s important to have the data. I think people are inspired to give from their hearts, so the stories are what pulls donors in, but then I think you need to have the data to back it up. And we really believe it’s three colors. It's good governance, strong financial performance and having the results – proving the results you intended.”

Sheehan, the charity chief in the New York attorney general’s office, echoed the need for transparency and accountability among veterans nonprofits. It’s an important cause, he said.

“If you're a decent person, you have some level of guilt about sending off someone else to fight wars for you. I think there's a deep concern what's happened to these people,” Sheehan said.

But in terms of which charities you should give to, the attorney general’s office can’t help you.

“We don't hand out awards for well-run charities,” Sheehan said. “Maybe we should do that.”

Five New York-based groups CharityWatch lists among its “Top Rated Charities”:

Fisher House: A+

Guide Dog Foundation for the Blind: A

Intrepid Fallen Heroes Fund: A

National Military Family Association: A

Bob Woodruff Family Foundation: A-

Additional resources for nonprofits from Syracuse University’s Institute for Veterans and Military Families:

“Serving Our Post-9/11 Veterans: Leading Practices Among Non-profit Organizations”

“Serving Our Post-9/11 Veterans: A Toolkit For Non-profit Organizations”