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‘Preferential treatment’ helped military charity’s fortunes to skyrocket
December 31st, 2008, 6:30 am · 15 Comments · posted by Teri Sforza, Register staff writer
The U.S. Department of Defense’s “America Supports You” program - a public relations effort launched by the Bush Administration to build support for the war - was plagued by mismanagement, misspent millions of dollars and gave preferential treatment to private “support-the-troops” charities, creating “a potential liability,” concludes a report by the federal Defense Department’s own Inspector General.
One charity benefiting from this arrangement was Operation Homefront, until recently a Santa Ana-based nonprofit that “provides emergency assistance and morale to our troops, to the families they leave behind and to
wounded warriors when they return home.”
Before Operation Homefront signed a “memorandum of understanding” with the Department of Defense - effectively a federal/military version of the Good Housekeeping Seal of Approval - Operation Homefront’s revenues were a modest $1.5 million.
The year after it signed with the Department of Defense, revenues skyrocketed nearly 800 percent - to $12.8 million. (See the blue lines on the chart.)
Operation Homefront executive vice president Amy Palmer responded to questions by email. “I want to make a very clear and critical point: the IG report was an assessment of the procedures of the America Supports You program. It in no way accuses Operation Homefront or any other charities of any wrongdoing whatsoever,” she wrote.
Operation Homefront is the first charity listed in the “Preferential Treatment” section of the report.
“DoD Public Affairs gave preferential treatment to select homefront organizations,” the report says. “Certain nonprofit organizations were provided with a DoD memorandum of understanding (MOU) that was used to legitimize their organization.”
On its web site, Operation Homefront boasts that it is “one of a select few charities” to operate under an MOU from the Department of Defense. ”Although the MOU does explicitly state that this agreement does not constitute DoD endorsement of Operation Homefront, the memorandum provides for DoD support, promotion within the military, and DoD’s recognition of consistent goals with its own program,” the report says. “We believe the MOU does constitute an endorsement by DoD.”
Operation Homefront’s Palmer doesn’t agree. ”Because we’re not privy to the relationships other charities have with America Supports You, we can’t speak to whether or not we’ve received preferential treatment,” she wrote. “While the MOU provides official recognition from the DoD, it does not entitle us or anyone else to any preferential treatment.”
The Inspector General examined Operation Homefront’s 2006 tax return and found several contributions
from Department of Defense contractors and America Supports You corporate supporters, including one from the public relations firm that got $8.8 million for running America Supports You ($10,000 contribution); and one from Fleishman-Hillard, another Defense Department contractor ($5,000 contribution).
“Further, (America Supports You) corporate supporters such as Wal-Mart, Tri-West Healthcare Alliance, and Toyota gave cash and non-cash contributions totaling $597,732 to the nonprofit,” the report says. “Operation Homefront was also added to the PGA TOUR, another (America Supports You) corporate supporter.”
In the wake of the agreement, a Register review of Operation Homefront’s tax returns shows that, between 2005 and 2007, its:
- expenses rose 388 percent
- program spending (on its core mission of supporting families and troops) rose 427 percent
- management spending rose 117 percent
- fundraising spending rose 670 percent
- and net assets - essentially how much money is in the bank - rose 1,211 percent, to $4.9 million.
Palmer said that the organization’s growth is “a reflection of the growing need in the military community for our services across the country and the product of several other factors that have enhanced our reputation apart from any connection to ASY. For example, more than $10 million of our revenue increase was due to two donors unrelated to ASY.
“Other contributing factors to our growth and success include the fact that Charity Navigator awarded us their highest 4-star rating for our conscientious stewardship,” she wrote. “This really raised our profile in the nonprofit community. We also went through an exhaustive external audit and were accepted as a beneficiary of the Combined Federal Campaign - the world’s largest and most successful annual workplace charity campaign. The audit also enabled us to qualify for many grants.
“We have a solid track record as a 501 (c )(3), and because of our performance we have earned the respect of the military, corporations, foundations, elected officials, individuals and military families themselves.
“As a nonprofit whose mission is to help military families in crisis, we greatly appreciate the support of all donations, whether it’s a check from Wal-Mart or spare change from a caring patriot.
“Like the other 380-plus groups who are a part of America Supports You, we’re here for our families above all else, and we can’t do that without generous donors.”
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Well, seems to me any group having this kind of “understanding” from government, really doesn’t neet *public* support.
So me and my dollars will be donating elsewhere.
But my vote is for Congress to pay a living wage to military personnel, so they don’t *need* outside help. Why can’t Congress consider that, instead of laws to rip off the consumer, such as this decision shows.
http://www.courtinfo.ca.gov/opinions/documents/A120277.PDF
Lobby your representative to introduce legislation to fix that piece of work.
Way to go OC Register and Terri Saforza. Once again you imply that there is something sinister about good people growing a nonprofit organization. You just can’t seem to help yourself. How is it that that a writer who knows absolutely nothing about starting or running a charity is so quick to report on them?
I say good going Operation Homefront!!! With an increase in revenue like this there will certainly be much in the way of help to military families far beyond what you used to be able to do. As to the increase in expenses what this writer does not seem to understand is that people need to be paid in order to run a foundation of this size. What they didn’t report is that in order to maintain your 4 star rating you must adhere to a maximum of about 20% cost to fundraising. That means 80 cents of every dollar raised must go out the door an into the hands of those you help. If the Register was held to such guidlines there would not be any paid reporters writing stories like this which might be a good thing.
One last question Ms. Saforza, what have you ever done for this country to defend our freedom or assist those who do? My guess is nothing but you sure seem to enjoy the rights they defend especially the one involving free speech.
You should be ashamed of your self.
Percentage comparisons are generally meaningless, often (intentionlly) misleading. This is called ’statisticulation,’ and this is why such numbers are so frequently hauled out–often the same statitistic being hauled by BOTH sides of the argument at the same time!
“If the “expenses” revealed here for Operation Homefront are solely its administrative services, they alone should send every paid worker at OH to Abu Ghraib for life imprisonment there. This is a scandal, a sickening one, if true.
ocoldude you are missing the point. Which is that U.S. taxpayer money and official government manpower went to legitimize, support, promote and publicize a private charity that has no special mandate nor appropriations for such. Since when??? There are millions of charities that do wonderful things for all kinds of people, including our military, and they didn’t get this kind of official government endorsement. Think of all the average citizens who pack care packages or donate time/services for our troops - out of their own pockets. Where is their official government endorsement and free taxpayer-funded PR?
ocoldude - I didn’t write the Department of Defense’s report. The DoD’s Inspector General did.
I was one of the Original member of Operation Homefront - ground zero. We have been screeming about this for years! One of the founder is a wife of Navy Officer, daughter of retired high ranking Navy Officer (now lawyer in AZ, I think). She is also friend of Kitty Martinez (wife of Sen. Martinez) who I think made connection to Washington. I don’t support any nonprofit who’s CEO gets paid over $120,000 for walking around smiling… there are 100% volunteer organizations out there doing pretty much the same. Believe me - I KNOW Amy Palmer - they pay credit card bills, rent, car payment of irresponsibles with your donation…. Homefront also have MOA from Navy League by hiring the person who is high ranking position in the League ( he got fired after they got what they want, off cause) Who you know matters in politics - they look after each other’s financial interest. God is on sale - sad stories of our military are also on sale - how dare you to make money on them! By the way, I am a mother of Marine - she will be deployed in a few weeks.
Teri, thank you for bringing this to light. Operation Homefront has been mismanaging public donations for years, and will continue to do so until they are forced to stop. They have a long history of mis-classifying expenses in order to make their program expenses look larger than they actually are, while understating management & fundraising expenses. Please continue to investigate and report this.
They are still rakin’ in plenty of cash at chapters all over the country! What is going on here?? If I were a reporter, I’d be digging deep into all this …
Operation Homefront to receive $75,000
By Chris Roberts / El Paso Times
Posted: 12/26/2008 12:00:00 AM MST
EL PASO — When Fort Bliss families with loved ones serving overseas have needed help getting a car repaired, moving or paying for a trip to a faraway hospital to receive medical care, they have been able to count on Operation Homefront of Texas. On Tuesday, Operation Homefront of Texas will receive a $75,000 donation from MillerCoors at the El Paso convention center as a part of the 2008 Sun Bowl Fan Fiesta.
more —-
Operation HomeFront needs IL conservatives to help
Kudos to the United Republican Fund today for prompting those on their email blast to support Operation Homefront’s Illinois Chapter. If you aren’t on the URF’s email list, URF President Steve Rauschenberger reminded us that at this time of year, we need to support those troops fighting the war on terrorism by supporting their families back here in their home state of Illinois.
Am I reading this right? It looks like PEOPLE are asked to volunteer, get donations, pack packages, provide contents, buy gifts, write letters, store customers buy toys and companies donate stuff. Then Operation Homefront puts their stamp on it and gets credit for it? Whats your opinion?
TX ” Dollar Tree stores and Operation Homefront ensured they won’t go without presents. Local Dollar Tree customers were asked to purchase a toy for donation when they shopped at the stores. The effort generated more than 6,000 toys for area military children. ”
NY/NJ “It also helps soldiers who are about to deploy or are just returning home from the battlefield. This holiday, Operation Homefront is asking people to sponsor a military family in their community, helping them buy gifts for their children and cooking a holiday meal.”
WI “The students’ letters were collected and handed over to Operation Homefront who took care of sending them to the troops. ”
WA “Normally, Padilla gave the goods to Operation Homefront Washington President who then drove the sweets to Madigan Army Medical Center. But on Dec. 5, Padilla personally delivered food and stocking stuffers to the soldiers at the medical center and Fort Lewis. ”
DE “The toys are for the families of deployed local soldiers as part of the armory’s inaugural toy distribution campaign. The toys were provided by Operation Homefront in cooperation with Dollar Tree and Dollar Express through customer donations.”
DC”The Lady Hoop Dogs - contacted potential donors, then spent time assembling each bike for distribution through Operation Homefront, a non-profit agency providing both emergency assistance and morale boosts to military troops, their families, and returning soldiers wounded in the line of duty. Thanks to the generosity of all donors, including Academy Sports and Outdoor,”
CA”Coronado High School’s (CHS) Friday Night Live club is currently accepting canned food and toy donations for Operation Homefront, a San Diego-based nonprofit organization that “provides emergency assistance and morale to our troops, to the families they leave behind and to wounded warriors when they return home.”
BJ, you are right on: “They have a long history of mis-classifying expenses in order to make their program expenses look larger than they actually are, while understating management & fundraising expenses.”
Case in point: In 2005, they reported $ 12,000 in salaries for Administrative Staff. However, actual wages paid for just their bookkepper and receptionist totalled more than $ 12,000. So, where did they bury the remainder of their administrative salaries?
In their most recent return, they show the following employees wages:
Amy Palmer - Exec. VP$ 91,000
Steve Harrington
BJ, you are right on: “They have a long history of mis-classifying expenses in order to make their program expenses look larger than they actually are, while understating management & fundraising expenses.”
Case in point: In 2005, they reported $ 12,000 in salaries for Administrative Staff. However, actual wages paid for just their bookkepper and receptionist totalled more than $ 12,000. So, where did they bury the remainder of their administrative salaries?
In their most recent return, they show the following employees wages:
Amy Palmer - Exec. VP$ 91,000
Steve Harrington
BJ, you are right on: “They have a long history of mis-classifying expenses in order to make their program expenses look larger than they actually are, while understating management & fundraising expenses.”
Case in point: In 2005, they reported $ 12,000 in salaries for Administrative Staff. However, actual wages paid for just their bookkeeper and receptionist totaled more than $ 12,000. So, where did they bury the remainder of their administrative salaries?
In their most recent return for 2007, they show the following employees wages:
Amy Palmer - Exec. Vice President $ 91,000
Steve Harrington - Former President $ 278,000
Jill Sturdy – Director of Finance $ 80,000
Jackie Lynstrom – Sponsorship Director $ 73,000
Meredith Levya – Founder $ 90,000
With nearly $ 613,000 in wages paid to the five highest paid employees, they reported only $ 208,000 under administrative overhead. I would like to know where the rest of the money ($ 408,000) is buried.
I agree with you that Teri should keep on this.
Teri Sforza,
I’m contacting you for permission to republish and post links to your article on Preferential Treatment of Military Charity’s by ASY at the Pentagon from the Orange County OC WACHDOG - Your Tax Dollars at work.
I’m a staff writer for Veterans Today News Network
Major Robert L. Hanafin, U.S. Air Force-Retired
And on the Editorial Board of Our Troops News Ladder affiliated with the Newsladder Network
I’m also an member of the Ohio Chapter of Military Families Speak Out (MFSO)
Ive been researching and writing an in-depth breakdown of the DOD/IG Report on America Supports You.mil that also takes let’s say a YOUR TAX DOLLARS AT WORK approach.
The timing (Tax Time) and significance of misusing and abusing tax payer dollars to fund a propaganda ad campaign not only has Pentagon employees at odds and disunited (note it was Stars and Stripes Newspapers named in the IG Report that was among those media outlets to break this story. Bickering and infighting within the Pentagon on the corruption and direction of ASY is quite evident in the IG Report and coverage given it by S and S plus other military related newspapers and journals.
Anyway, I had gotten to the section of the IG Report on Preferrential Treatment when a colleague sent me this link to your article.
I’d like permission to repost and republish it under FREE USE as a member of MFSO, for I do not get paid to blog it, I’m a volunteer.
Of course, I could go ahead and post it using FREE USE anyway, but I prefer the courtesy of asking your permission first.
I will of course give both you and the OC Register full credit and a link to the article with very little commentary because you about said it all.
I especially like the balanced coverage you gave Homefront organizations for the focus of my effort is the wasted tax angle NOT going after or breaking up war profiteering homegrown troop support organizations that take precious dollars away from long established in-house military service aid and welfare programs in existence long before ASY and 911.
Lastly, I believe that the details of the DOD/IG Report that are public domain and available online would make an outstanding investigative report for PBS. I’m contacting Bill Moyers, Frontline, and NOW to see if any investigative reporters would be interested in covering how our tax dollars were wasted on ASY and by whom. Why?
Because many personages named and not named in the IG Report remain at the Pentagon on President-elect Obama’s shift and they SHOULD NOT!
Bobby Hanafin
The Mustang Major
Bonnie Russel said, “Well, seems to me any group having this kind of “understanding” from government, really doesn’t neet *public* support. So me and my dollars will be donating elsewhere. But my vote is for Congress to pay a living wage to military personnel, so they don’t *need* outside help.”
First, Bonnie, I’m going down these comments in order that I read them and do not know if the author gave you a response, we’ll find out.
I’m speaking as a Veteran of two wars, a retired military officer, and Air Force Dad of an Army ground trooper. Regarding public support, if you mean tax payer support or funding, YOU are absolutely right. The research I’ve done on the DOD/IG report itself says lots about the fraud, waste, and abuse of our tax dollars to support a propaganda effort that frankly took tax payer funding and donations away from long time reputable military moral, welfare, and family support entities within the Armed Forces. Each service has its own aid society or charity if you will and has had them long before ASY became a wet dream in Donald Rumsfeld, G.W. Bush’s, or Allison Barbers partisan demented minds. ASY was a government stamp of approval for which Troop and Military Family supports groups could be recognized based solely upon partisan political views = an organization was required to passionately support both President Bush and Our Troops anything questioning what our troops were ordered to do was by definition NOT SUPPORTING THE TROOPS. It was a smoke screen to serve as cover for a propaganda program USING our troops and military families as their COVER story.
During this economic meltdown that see no immedicate end in sight, if you find yourself among the decreasing number of people who can donate your dollars elsewhere, I must say that in all fairness ASY is sort of under NEW MANAGEMENT (but still influenced by the Bush Admin staying with the Obama Admin at the Pentagon)
Go to the ASY Website now, and though I’m a proponent of totally dismantling this propaganda program, I’m not going to fall on my sword about it nor lose any sleep, ASY has already began implementing some of the corrective actions strongly recommended in the DOD/IG Report.
Of note, ASY has distanced itself from the home front organizations ASY use to bless with a stamp of approval. The site now has a caveat that virtually says the ASY logo on any home front groups site is useless as a Pentagon stamp of approval. ASY can now only recommend by link those groups it has previously screened, AND best part is that the application process just to be linked to the Pentagon site requires showing proof of IRS documentation, and has no restrictions on political views, even if those views do not support our troops mission.
The part I really like as career military, a Veteran, and Military Family member of an Iraq War Vet, is that ASY now places more emphasis on contributers considering giving to in-house military service charity-like groups that have existed for decades before 911 or the birth of Donald Rumsfeld’s ASY.
Lastly, ASY’s new management strongly recommends people hesitant to give or even anxious to give FIRST check out the Charity Watchdog organizations, like Charity Navigator that Congress uses to monitor SCAMs in the Veteran and Troops giving arena.
A review of military and veteran related humanitarian efforts will show that the most efficient at ensuring donations and support goes to our troops are those that were already long established within each military service.
One will find very few of the homegrown home front organizations that were born out of 911 and the War on Terror for whatever motivation, because a Charity must exist with IRA documentation for a minimum of five years before Watchdog’s rate them.
In all fairness, Operation Homefront is rated very high and efficient by most Charity Watchdogs that monitor all charities not only Vet and Military related.
Major Bobby Hanafin
U.S. Air Force-Retired
ocoldude said, “Once again you imply that there is something sinister about good people growing a nonprofit organization. How is it that that a writer who knows absolutely nothing about starting or running a charity is so quick to report on them?
With an increase in revenue like this there will certainly be much in the way of help to military families far beyond what you used to be able to do. As to the increase in expenses what this writer does not seem to understand is that people need to be paid in order to run a foundation of this size. What they didn’t report is that in order to maintain your 4 star rating you must adhere to a maximum of about 20% cost to fundraising. That means 80 cents of every dollar raised must go out the door an into the hands of those you help.
One last question Ms. Saforza, what have you ever done for this country to defend our freedom or assist those who do? My guess is nothing but you sure seem to enjoy the rights they defend especially the one involving free speech.
You should be ashamed of your self.”
I just couldn’t help myself in responding to your comments ocoldude, not to argue with you or put you in your place, I believe that Ms. Saforza did that sufficiently and accurately.
You are obviously a Vet who fought for the right for this reporter or any reporter to exhibit their first amendment rights, then when they do you want to shame them. Don’t you find that quite a bit inconsistent. My response to you as a Lifer is well, thank you ocoldude for standing beside me to protect and defend my right, and Ms. Saforza’s right to say or write what’s on our mind based on the research we’ve done. However, you are being insincere to say you serve to defend the first amendment then want to shame those of us who disagree with you.
Simply put, Ms. Saforza has nothing to be ashamed of as long as she told the truth, and since her coverage was based on an OFFICIAL DOD/IG report, I’d say you and yours have more to worry about no longer being given a stamp of approval by the Pentagon at the cost of us taxpayers who do not support your home front organization but prefer to donate to long established in-house service organization that have been and still are doing just fine without any politically motivated non-profit coming around with questionable motives base on 911 and partisan politics.
You mention Operation Homefront and so did Ms. Saforza, at least she mentioned them and how well they are rated by Congressionally approved Charity Watchdog like Charity Navigator. However, what she and you failed to mention or maybe don’t care in your case is that Operation Homefront is about one of the very few recently motivated non-profits to actually have a plan for ensuring more funds raised goes to our troops and military families than admin overhead and into building the non-profit for self centered reasons.
Yes it is expensive to manage and man any non-profit when you fail to effectively use volunteers. What really gets disgusting is when money intended to go to support our Vets or troops really ends up supporting some Madison Avenue or Washington PR Firm or Ad agency to increase a groups membership recruitment or sell the non-profit to the public.
Lastly, what good are shoestring organizations even IF they passionately support our troops but question their politically motivated mission (WE have no say in!) when YOU take precious few and getting fewer donations from the long established Vet and troop support organs like the USO, Fisher House, DAV, Army Emergency Relief, Air Force Aid Society, Marine Relief, Navy Relief, and so on that are NOW highlighted on the ASY website.
These reputable groups do not need nor warrant any ASY bs stamp of approval or logo nor require screening for political correctness or incorrectness.
Frankly, it really makes no sense for anyone to ask Ms. Saforza, what she or any other reporter has ever done for our country to defend our freedom or assist those who do? My guess is nothing but you sure seem to enjoy the rights they defend especially the one involving free speech.
Why should she or any other reporter NOT enjoy the rights WE defended for them to have? Seriously, why not? I can’t speak for you, but I served my entire military career to include DOD civilian service much of it at the Pentagon to defend the Constitution and Bill of Rights not some temporary politician or political ideology. Frankly, I’ll be just as hard on Barrack Obama as I was with G.W. Bush and company if Obama make dumb decisions or gets too many young American killed for lord only knows what?
Our military family spend most of OUR military career in isolation on military bases around the world after Vietnam until after the first Gulf War, we knew that the vast majority of American did not want to do what we did, frowned upon it, or just were not FIT to do what WE did.
What you are saying to her about SHAME could frankly be applied to everyone in America outside the precious few within the real patriotic 0.1% who have served or do serve or will serve in military, that’s frankly an ARROGANT and DELUSIONAL ATTITUDE to have when WE are in the MINORITY who want to defend any reporters right to report.
Bobby Hanafin
Major, U.S. Air Force-Retired
PS: This is by no means a defense of Ms. Saforza or any other reporter, the media has been just as guilty of selling ASY as any PR firm in DC, so my respect for reporters is right up there with politicians and lawyers or both. I just can’t stand by as a fellow Vet shames any American citizen (reporter or not) for taking advantage of the rights WE say that we protected by trying to SHAME them. To do so, well SHAME on US.