Video Transcript
Steve Nardizzi, former CEO of Wounded Warrior Project, was an amazing leader for the Wounded Warrior Project. He took the organization from teeny-tiny, to a budget of over $400 Million in only a few years. Very few organizations and CEO’s can say that.
Imagine how many people you can help with $1 million versus $400 million.
An Inspiration to Fundraisers Everywhere
Mr. Nardizzi was a real inspiration to fundraisers everywhere.
I heard him speak a few years back at a major fundraising conference in Washington DC. I was looking forward to hearing again at the AFP Conference in Boston next week. Now that he’s been terminated, I doubt he’ll show. But I hope he does – I’d love to hear his side of the story.
As fundraisers, we know it takes money to raise money. The question is, how much? What’s the right amount?
- Is it 20%?
- Is it 30%?
- What about 50%?
And, how do we communicate that with donors and the public?
Should Programs and Services Get Priority?
Many donors believe that the vast majority of their dollars should be put directly toward programs and services. But what does that really mean?
Picture this:
Organization A boasts only 10% goes to administrative costs, including fundraising. Donors love to hear that.
The budget has stayed the same for more than a decade. Programs and services haven’t grown in over 30 years. The founding executive director is passionate about the cause, but has no formal management or fundraising experience or training. No one knows if the programs are working, because they are not being evaluated. There is just enough to keep the lights on – barely.
Organization B, on the other hand, has 40% overhead… much of that going to fundraising.
It has grown rapidly in the last 10 years. The Executive Director has years of experience and advanced training in nonprofit management and fundraising. The budget has grown tenfold as have the number of clients served. Programs and services are regularly evaluated and modified to maximize impact.
Which organization would you rather support?
Paying Nonprofit Staff What They’re Worth
It’s nearly impossible for nonprofit organizations to operate at full efficiency and tackle some of the world’s most challenging issues when they don’t have the latest technology, can’t hire the best staff members, and don’t experiment or innovate.
Steve Nardizzi was a hero in many fundraising circles. To see him fall is devastating. It’s also heartbreaking to learn he was spending money on first class tickets, accommodations, and parties.
That doesn’t negate the fact that nonprofit staff members should be paid what they’re worth.
I want only the best people to lead the world’s most important organizations. To get them, we must compensate them.
It’s when staff members are paid peanuts that we get dysfunctional organizations and inexperienced leaders. If donors want to have the most impact, they will need to pay the best leaders that money can buy.
Changing the Conversation
We need to help change the conversation.
We cannot solve the world’s most challenging problems with inexperienced and unqualified leaders. We cannot solve the world’s problems sitting on broken chairs and using outdated computers.
Mr. Nardizzi provided unprecedented leadership and growth to Wounded Warriors. Somewhere along the way he crossed a line.
We are the ones who have to defend high salaries and administrative costs to donors. It gets harder each time there’s a scandal.
I hope Mr. Nardizzi shows up at the AFP conference next week. I’d love to hear from him.
How will you turn this situation into an opportunity to engage your donors? Please join the conversation and leave a comment below.
Liked the video. I generally prefer to read text. Your presentation was very good, as usual. Hope to see you in Boston
I found the music over powering but otherwise the video was good.
This does make our jobs a lot harder. I also feel terrible for the veterans because the organizations that ‘support’ them often get a bad rap. It costs money to make money but we must always be good stewards of our donors gifts.
I hear your message and am an advocate for changing this conversation. It is a message we have always given. Please keep up your great work to educate us on how to do that. I understand and appreciate hiring good talent – it is a MUST HAVE for all non-profits to be the best, to grow and increase impact. Thank you!
As for Steve, I absolutely agree that he crossed a line that will cause the rest of us in the non-profit sector to have to justify our expenses again to our boards and our donors.
The one thing that I don’t necessarily agree with is that you have to pay top dollar to get the best people. It has been my experience that some of the best staff, fundraisers, and board members don’t need high salaries to work in a non-profit whose cause they believe in. I have worked with folks who busted their butts every day for their non-profit in spite of offers from other organizations of higher salaries because they were committed to the cause, mission, and vision of their organization. Thank God for people like that and thank you for doing what you do to make the non-profit world a little better place. Have a great day!
Thanks, Tom. You’re right – they don’t need the TOP salaries, and are unlikely to get them. What I meant and should have articulated more clearly is that nonprofit staff members should be paid a decent salary and not need to scrape by. Salaries will never compete with the corporate sector, but we should paid well for our hard work.
The content is great – it’s a conversation that is worth having although I am not optimistic general perceptions will shift easily.
Wow. There is no way I can disagree with your feelings about Nardizzi more. I’ve been in the non-profit sector over 20 years and find his actions more than reprehensible — I find them downright disgusting. Sure, he was a fundraising juggernaut….but the money he was raising wasn’t doing what donors hoped it would do. Instead it going to bloated salaries and marketing schemes. My favorites are the instances where WWP sued little local non-profits over supposed “branding and copyright infringements”. Little non-profits with no staff, helping local vets, with branding that would never lead a sane person to think they were impersonating WWP. Was that money well spent????
Absolutely, non-profit professionals should make “what they are worth” and no, that’s not happening. But this man gives us all a bad name and hurt our cause. He wasn’t fundraising for a cause, he was fundraising for himself. What should WWP, and all non-profits, learn from this? It’s very simple – don’t hire Steve Nardizzi or those of his ilk. I think the point you are ultimately trying making is good a one, but lionizing this man in order to do it isn’t effective.
Marci, I was unaware of the lawsuits. Thanks for bringing that to our attention.
Great content! With our profession working to gain credibility, these kinds of setbacks can be devastating. Keep up the thoughtful work!
Try this Ted Talks by Dan Pallotta. Adds a bit to the dialogue.
https://www.ted.com/talks/dan_pallotta_the_way_we_think_about_charity_is_dead_wrong
Quite honestly, I would like to know about the facts before I hang Nardizzi out to dry.
And, in the meantime, let’s take a look at the costs we spend to raise a dollar at our galas, the ostentation at those events and ask the donors if those are really incremental dollars or their basic annual gift.
I was one of the first 50 employees and worked for WWP for three years during their huge growth period. If I meet you at the conference, I can tell you exactly what was going on there.
Steve and his executives were in the right place at the right time…the whole nation was interested in veteran’s issues and we had a really great logo.
He’s definitely a really good public speaker, but he was no fundraising genius…and trust me, all of the rest of us at WWP DID NOT have huge salaries…
Thanks for sharing, Mary! I’d love to meet you at the conference.
Amy,
Good thoughts and points, thanks for keeping the conversation in front of us. I’ve tried to walk donor through this idea over the years and some do understand, but not all.
THE BOARD of the WWP are to blame for this debacle. IF they were doing their job/responsibility there never would have been an issue. I read the entire 990 of WWP and I found areas that “just didn’t add up” and should have promoted questions from the board. Unfortunately, what I have found in many organizations are self elected, ineffective boards, who’s members are friends first, and board members. In several situations the CEO PICKED the board members, which the board then voted on with little information. Just as the Kolman Foundation it will take more than just the “top executives” leaving to change the culture, it will take some new independent board members. . I wonder how many volunteers, or employees have left in frustration or fired because they said something about the waste of the board and “upper management”? It will be interesting to read the next 990 to find out how much was spent on “media , public relations to cover up this waste of donations..
The larger population has taken this scandal to heart. They hold the “Third Sector” on a higher moral and ethical level than the private or even government sectors. All it takes is one fall from grace to hold the rest of us accountable.
Amy,
the video and presentation was excellent. I may not agree with all your points, but as the comment section shows, you sparked interest in all of us to respond.
What would be your follow-up recommendations to all the Executive Directors and Development professionals in dealing with this issue within their own organizations? It NEEDS to be discussed and not left to be the elephant in the room or cast doubt from donors on the organizations they support.
Thanks!
Cindy,
My recommendation would be to start the conversation with board members, volunteers in donors. Hold a conference call to discuss the issue, write an article about it in your newsletter or the local paper. Talk about why overhead is important and how your organization is honest and transparent about what you are doing with the funding.
Best,
Amy
There are a lot of numbers that add up to how we look at a nonprofit’s effectiveness and efficiency. If we only look at one number (i.e. percentage spend on fundraising), we’re missing the vast majority of the picture. If you haven’t seen the Charity Defense Council media advisory on the Wounded Warrior Project scandal, it’s an interesting read: http://charitydefensecouncil.org/advisory/wwp1.pdf
Granted, Steve was on their board, so you could choose to dismiss everything they say, but the broader picture the report shows adds important depth and detail to this debate. In the end, would savvy donors really prefer “a bake sale with 0% that raises $10 for the poor, or a professional enterprise with 15% overhead that raises hundreds of millions?”
Those of us in the nonprofit sector need to seriously examine how quickly we are to assume the worst when we hear media reports bashing an organization. I’m guilty of this with the WWP scandal – my first thought was, “Darn it! I hate it when groups don’t do the right thing – it makes the work so much harder for the rest of us!” I should have first thought to look at the bigger picture, all the facts, and think of ways to help better educate the media and donors on what truly makes nonprofits effective.
It is sad that nonprofits have to continually defend their costs, but I also do not agree that “you get what you pay for” when it comes to salaries, whether in the for-profit or non-profit sector. I have worked in both fields, and it is really a mixed bag. That said, nonprofit professionals deserve a reasonable salary.
Mr. Nardizzi definitely did some good work for WWP. But, what about the rest of the hard working staff. Did they receive the same type of compensation? Did the organization grow too fast? It seems like good governance took a back seat here.
This story brings the sector down. More questions than answers. The conversation should continue. Perhaps there is a middle ground somewhere. . .