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Canadian veterans' charities: Do you know where your donor dollars are going?

Canadian soldiers in the Dand area of Kandahar Province, Afghanistan, Jan. 26, 2010. Organizations created over the past decade to support veterans – especially soldiers returning from Afghanistan – now number among the largest charities in Canada and take in millions of dollars annually from Canadians who have been moved to help those who served their country.

Kirsty Wigglesworth/AP

Organizations created over the past decade to support veterans – especially soldiers returning from Afghanistan – now number among the largest charities in Canada and take in millions of dollars annually from Canadians who have been moved to help those who served their country.

Like all charities, those veterans' groups have administrative costs which Revenue Canada requires to be posted online. But different reporting methods used by the various organizations make it difficult to determine just how much is being spent on operations and how much is going to the veterans themselves.

At first glance, the major veterans' organizations appear to be better than average, compared with other charities, at targeting donations to meet their stated mandates. But a deeper look suggests that significant donor dollars are being spent on salaries, office expenses and fundraising.

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Sean Bruyea, a veterans' advocate who has been researching the charities, says they tend to be opaque when it comes to explaining how they spend money and what they are achieving for vets. "I think veterans' groups should be audited," Mr. Bruyea said, "because Canadians deserve to have a little bit more transparency in this."

He argues that many of the jobs performed by the charities would be better left in the hands of Veterans Affairs which, despite poor service standards, offers low overhead. "Some fundamental questions need to be asked," he said. "Can government provide these services better?"

Any group that wants to maintain charitable status must complete an annual financial report for the Canada Revenue Agency which is, in turn, posted to the CRA website. Among the national veterans' charities that have filed such reports are True Patriot Love, Veterans Emergency Transition Services, Canada Company and Wounded Warriors Canada.

Three of the four of those groups report revenues of more than a million dollars annually and Kate Bahen, the managing director of Charity Intelligence Canada, says any charity that takes in more than a million dollars a year ranks among the top 4 per cent in Canada.

Of the 700 organizations surveyed by Charity Intelligence Canada, said Ms. Bahen, the average amount spent on overhead – administrative costs plus fundraising – is 26 cents on the dollar. According to their CRA filings, Veterans Emergency Transition Services, Canada Company and Wounded Warriors Canada all did better than that.

But the details suggest another story.

The veterans' charity that transparently spent more than 26 per cent of its budget on overhead in 2015 was True Patriot Love. According to the documents it filed with Revenue Canada, True Patriot Love, which performs a wide range of services related to mental and physical rehabilitation of former soldiers and also gives money to other veterans' charities, spent 11 per cent of its budget on management and administration and another 36 per cent on its fundraising efforts.

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True Patriot Love's fundraising costs are high because the group raises much of its money through gala dinners, which can be expensive to host. But it also brings in a lot of money that is used to help veterans.

True Patriot Love paid $989,702 for 10 full-time and two part-time workers in 2015. In the same year, it spent $1,435,716 on charitable programs and donated another $1,464,873 to other charities and qualified donors. There is also much additional financial documentation about the charity posted on its website, a transparency that Ms. Bahen applauds.

In contrast with True Patriot Love's relatively large stated overhead, the Halifax-based Veterans Emergency Transition Services (VETS), which provides shelter and other necessities of life to homeless vets, lists no administration or fundraising expenses for 2015 in the summary of its CRA report.

But another section of the form says the group spent $120,744 of its $538,158 budget on the salaries of two workers – which has since been increased to three people for the same amount of money – plus an additional $87,686 in assorted expenses such as travel, advertising and office supplies. The salaries plus expenses account for 39 per cent of the group's revenue expenditures.

Debbie Lowther, the chair of VETS who works full-time but take no salary herself, says the group receives most of its money from the federal government and the government dictates how much can be spent on overhead. Its two paid staff, she said, administer the work of more than 500 volunteers and, in doing do, provide direct services to veterans.

VETS helped nearly 1,500 veterans last year on a comparably small budget, Ms. Lowther said. "It is shocking, really," she said of the number of veterans who are on the street, "but we're doing what we can."

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The Revenue Canada forms for Canada Company, which helps veterans and their spouses find jobs and provides scholarships for children of fallen soldiers, are difficult to decipher. It is much easier to sort out the organization's expenditures by looking at the statement of operations which it posts online, along with much other supporting data.

That shows that in 2015, Canada Company spent $793,388 of its $2,094,769 budget on salaries. It also spent $200,288 on fundraising and $318,717 on overhead expenses including office supplies, travel, telephone, accounting, translation, credit card fees, rent, legal fees, insurance and bank charges.

The salary costs alone account for 38 per cent of the budget. But Angela Mondou, Canada Company's president, says just $136,995 of the money spent on salaries went to administration. The rest paid the people who put on the organization's programs.

"They are our product and our service," said Ms. Mondou. "They are what our funding pays for. We have educators that educate, work with, manage the relationship and the education of the business world." And, as a result, she said, more than 700 veterans found jobs through Canada Company in 2015.

Wounded Warriors Canada, which was created to improve the morale and welfare of injured soldiers and assists about 1,200 vets a year, spent $552,392 on administration, including salaries, in 2015 and nothing on fundraising. With a total budget of $2,151,907, Wounded Warriors' overhead is just over 25 per cent of its expenditures.

Scott Maxwell, the executive director, says even that percentage is misleadingly high because Canada Revenue insists that promotional items such as the armbands the group gives out at cycling events must be classified under administration rather than programs.

"They have just lumped everything under management and administration," said Mr. Maxwell. In fact, he said, Wounded Warriors aims to keep its overhead costs at about 15 per cent of its overall budget. But, unlike Canada Company and True Patriot Love, Wounded Warriors does not post an annual report online. Mr. Maxwell said his donors have always been satisfied with what appears on the Canada Revenue Agency site to explain where the group's money goes.

Ms. Bahen says the kind of information contained in an annual report can be helpful to those who are thinking about giving.

High overhead and large budgets for salaries do not mean a charity is unworthy of donations or does not provide value, she said.

Given the complicated nature of the information provided, said Ms. Bahen, the best course of action for a savvy donor may be to ignore the costs, look at the overall budget, then consider how many veterans are being served. "At the end of the day," said Ms. Bahen, "the important thing is how much did it cost to help a vet?"

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About the Author
Parliamentary reporter

Gloria Galloway has been a journalist for almost 30 years. She worked at the Windsor Star, the Hamilton Spectator, the National Post, the Canadian Press and a number of small newspapers before being hired by The Globe and Mail as deputy national editor in 2001. Gloria returned to reporting two years later and joined the Ottawa bureau in 2004. More


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