Connecticut’s entire Congressional delegation sent a letter this week to the chairman of the Federal Trade Commission, urging the watchdog agency to investigate the Veterans Support Organization, a Rhode Island-based nonprofit that has raised millions of dollars, much of it via camouflage-clad solicitors who stand outside grocery stores and other shops.
The unusual letter was in response to complaints by officials with the Veterans of Foreign Wars, who are concerned that VSO is employing solicitors who claim to be volunteers, but are actually paid a commission based on the money they bring in. The senators and House members also expressed alarm at the group’s finances, noting that VSO collected $5.8 million in fiscal year 2010, but spent only $379,000 on grants to veterans and veteran groups.
“We urge the FTC to continue to prosecute sham charities and protect the credibility and effectiveness of legitimate nonprofit organizations that really help America’s heroes,” the delegation wrote.
Several years ago, the Courant ran a lengthy investigation of veterans charity, noting their inefficiency and identifying those that spent pennies on the dollar — and in some cases, less than a penny on the dollar — for charitable purposes.
So how does the Veterans Support Organizations stack up? It’s a complicated question, because the way the charity keeps its books, it counts all of the commissions paid to those solicitors – reportedly up to 30 percent – as part of an “on-the-job training program” for down-on-their-luck veterans and others.
As a result, the group in fiscal year 2010 claimed to spend not one penny on fundraising expenses, and attributed 70 percent of its $5.7 million in spending to that job-training program, which was also the source of virtually all of its fundraising. That purported jobs program has come under fire not only for allegations that solicitors falsely claim they are volunteers, but also because some have given the false impression they are military veterans. The nonprofit in fiscal 2010 spent more than $70,000 on uniforms — which it also classified as a charitable program expense — and in recent years solicitors have generally been dressed in fatigues, camouflage or khakis when collecting money.
The Veterans Support Organization has also run afoul of charity laws in Tennessee, leading to a negotiated $20,000 settlement. And consumer reporter Arnold Diaz sent an undercover producer to interview solicitors last year, and caught them making false claims about how the group spends its money.
Despite the controversies, it’s a lucrative operation for founder Richard Van Houten. In fiscal year 2009, he collected $120,000 as chief executive officer. The following year, donations more than doubled – and so did his salary, reaching $255,000.
For more details on the group’s finances, click the image below.