Charity Review

  • Issued: March 2013
  • Expires: March 2015

Paralyzed Veterans of America

Standards Not Met

  • 13

800-424-8200

801 18th Street NW
Washington, DC 20006

http://www.pva.org

800-424-8200

801 18th Street NW
Washington, DC 20006

http://www.pva.org

Standards Not Met

This organization does not meet one or more of the 20 Standards for Charity Accountability. Click the conclusions section below for more information.

Standards For Charity Accountability

Governance

  1. Board Oversight

    Oversight of Operations and Staff: Standard 1

    Description
    Organizations shall have a board of directors that provides adequate oversight of the charity's operations and its staff. Indication of adequate oversight includes, but is not limited to, regularly scheduled appraisals of the CEO's performance, evidence of disbursement controls such as board approval of the budget, fund raising practices, establishment of a conflict of interest policy, and establishment of accounting procedures sufficient to safeguard charity finances.

    The organization meets this standard.

  2. Board Size

    Number of Board Members: Standard 2

    Description
    Soliciting organizations shall have a board of directors with a minimum of five voting members.

    The organization meets this standard.

  3. Board Meetings

    Frequency and Attendance of Board Meetings: Standard 3

    Description
    An organization shall have a minimum of three evenly spaced meetings per year of the full governing body with a majority in attendance, with face-to-face participation. A conference call of the full board can substitute for one of the three meetings of the governing body. For all meetings, alternative modes of participation are acceptable for those with physical disabilities.

    The organization meets this standard.

  4. Board Compensation

    Compensated Board Members: Standard 4

    Description
    Not more than one or 10% (whichever is greater) directly or indirectly compensated person(s) serving as voting member(s) of the board. Compensated members shall not serve as the board's chair or treasurer.

    The organization meets this standard.

  5. Conflict of Interest

    Conflict of Interest: Standard 5

    Description
    No transaction(s) in which any board or staff members have material conflicting interests with the charity resulting from any relationship or business affiliation. Factors that will be considered when concluding whether or not a related party transaction constitutes a conflict of interest and if such a conflict is material, include, but are not limited to: any arm's length procedures established by the charity; the size of the transaction relative to like expenses of the charity; whether the interested party participated in the board vote on the transaction; if competitive bids were sought and whether the transaction is one-time, recurring or ongoing.

    The organization meets this standard.

Measuring Effectiveness

  1. Effectiveness Policy

    Board Policy on Effectiveness: Standard 6

    Description
    Have a board policy of assessing, no less than every two years, the organization's performance and effectiveness and of determining future actions required to achieve its mission.

    The organization meets this standard.

  2. Effectiveness Report

    Board Approval of Written Report on Effectiveness: Standard 7

    Description
    Submit to the organization's governing body, for its approval, a written report that outlines the results of the aforementioned performance and effectiveness assessment and recommendations for future actions.

    The organization meets this standard.

Finances

  1. Program Expenses

    Program Service Expense Ratio: Standard 8

    Description
    Spend at least 65% of its total expenses on program activities.

    The BBB is unable to verify if this organization meets this standard.

  2. Fund Raising Expenses

    Fund Raising Expense Ratio: Standard 9

    Description
    Spending should be no more than 35% of related contributions on fund raising. Related contributions include donations, legacies, and other gifts received as a result of fund raising efforts.

    The BBB is unable to verify if this organization meets this standard.

  3. Accumulating Funds

    Ending Net Assets: Standard 10

    Description
    Avoid accumulating funds that could be used for current program activities. To meet this standard, the charity's unrestricted net assets available for use should not be more than three times the size of the past year's expenses or three times the size of the current year's budget, whichever is higher.

    The organization meets this standard.

  4. Audit Report

    Financial Statements: Standard 11

    Description
    Make available to all, on request, complete annual financial statements prepared in accordance with generally accepted accounting principles. When total annual gross income exceeds $500,000, these statements should be audited in accordance with generally accepted auditing standards. For charities whose annual gross income is less than $500,000, a review by a certified public accountant is sufficient to meet this standard. For charities whose annual gross income is less than $250,000, an internally produced, complete financial statement is sufficient to meet this standard.

    The organization meets this standard.

  5. Detailed Expense Breakdown

    Detailed Functional Breakdown of Expenses: Standard 12

    Description
    Include in the financial statements a breakdown of expenses (e.g., salaries, travel, postage, etc.) that shows what portion of these expenses was allocated to program, fund raising, and administrative activities. If the charity has more than one major program category, the schedule should provide a breakdown for each category.

    The organization meets this standard.

  6. Accurate Expense Reporting

    Accuracy of Expenses in Financial Statements: Standard 13

    Description
    Accurately report the charity's expenses, including any joint cost allocations, in its financial statements. For example, audited or unaudited statements which inaccurately claim zero fund raising expenses or otherwise understate the amount a charity spends on fund raising, and/or overstate the amount it spends on programs will not meet this standard.

    PVA does not meet this Standard because in the Alliance's opinion, the 2011 audit report does not provide an accurate presentation of PVA's fund raising and program service expenses.

    PVA provided a copy of its audited financial statements for the fiscal year ended September 30, 2011, which included an auditor's opinion that the statements were prepared in accordance with Generally Accepted Accounting Principles (GAAP). According to the audited financial statements, PVA incurred joint costs of $68,058,301 for informational materials and activities that include fund raising expenses. Of this amount, $32,849,895 was allocated to program service expenses, $30,796,784 was allocated to fund raising expenses, and $4,411,622 was allocated to administrative expenses.

    Based on an evaluation of sample PVA appeals, the BBB Wise Giving Alliance disagrees with the allocation of $32,849,895 of direct mail appeals to the program service category. The Alliance is of the opinion that the contents of the direct mail appeals do not substantiate 48% of the cost of direct mail appeals to program service expenses. A significant portion of the content of the appeals could be considered fund raising, as it explains why one should donate to PVA rather than fulfilling a programmatic or administrative function.

    Depending on how one recognizes PVA's direct mail expenses, its fund raising costs could be higher than the 23% of related contributions that was reported by PVA and its program services could be lower than 71% of total expenses also reported by PVA. Since the Alliance disagrees with PVA's joint cost allocations, we are unable to determine whether the organization meets Standards 8 and 9, which address fundraising and program expenses.

  7. Budget Plan

    Budget: Standard 14

    Description
    Have a board-approved annual budget for its current fiscal year, outlining projected expenses for major program activities, fund raising, and administration.

    The organization meets this standard.

Fund Raising & Info

  1. Truthful Materials

    Misleading Appeals: Standard 15

    Description
    Have solicitations and informational materials, distributed by any means, that are accurate, truthful and not misleading, both in whole and in part. Appeals that omit a clear description of program(s) for which contributions are sought will not meet this standard. A charity should also be able to substantiate that the timing and nature of its expenditures are in accordance with what is stated, expressed, or implied in the charity's solicitations.

    The organization meets this standard.

  2. Annual Report

    Annual Report: Standard 16

    Description
    Have an annual report available to all, on request, that includes: (a) the organization's mission statement, (b) a summary of the past year's program service accomplishments, (c) a roster of the officers and members of the board of directors, (d) financial information that includes (i) total income in the past fiscal year, (ii) expenses in the same program, fund raising and administrative categories as in the financial statements, and (iii) ending net assets.

    The organization meets this standard.

  3. Website Disclosures

    Web Site Disclosures: Standard 17

    Description
    Include on any charity websites that solicit contributions, the same information that is recommended for annual reports, as well as the mailing address of the charity and electronic access to its most recent IRS Form 990.

    The organization meets this standard.

  4. Donor Privacy

    Privacy for Written Appeals & Internet Privacy: Standard 18

    Description
    Address privacy concerns of donors by (a) providing in written appeals, at least annually, a means (e.g., such as a check off box) for both new and continuing donors to inform the charity if they do not want their name and address shared outside the organization, (b) providing a clear, prominent and easily accessible privacy policy on any of its websites that tells visitors (i) what information, if any, is being collected about them by the charity and how this information will be used, (ii) how to contact the charity to review personal information collected and request corrections, (iii) how to inform the charity (e.g., a check off box) that the visitor does not wish his/her personal information to be shared outside the organization, and (iv) what security measures the charity has in place to protect personal information.

    The organization meets this standard.

  5. Cause Marketing Disclosures

    Cause Related Marketing: Standard 19

    Description
    Clearly disclose how the charity benefits from the sale of products or services (i.e., cause-related marketing) that state or imply that a charity will benefit from a consumer sale or transaction. Such promotions should disclose, at the point of solicitation: (a) the actual or anticipated portion of the purchase price that will benefit the charity (e.g., 5 cents will be contributed to abc charity for every xyz company product sold), (b) the duration of the campaign (e.g., the month of October), (c) any maximum or guaranteed minimum contribution amount (e.g., up to a maximum of $200,000).

    The organization meets this standard.

  6. Complaints

    Complaints: Standard 20

    Description
    Respond promptly to and act on complaints brought to its attention by the BBB Wise Giving Alliance and/or local Better Business Bureaus about fund raising practices, privacy policy violations and/or other issues.

    The organization meets this standard.

Conclusion

Paralyzed Veterans of America does not meet the following 1 Standards for Charity Accountability:

Standard 13 - Accuracy of Expenses in Financial Statements
Accurately report the charity's expenses, including any joint cost allocations, in its financial statements. For example, audited or unaudited statements which inaccurately claim zero fund raising expenses or otherwise understate the amount a charity spends on fund raising, and/or overstate the amount it spends on programs will not meet this standard.

PVA does not meet this Standard because in the Alliance's opinion, the 2011 audit report does not provide an accurate presentation of PVA's fund raising and program service expenses.

PVA provided a copy of its audited financial statements for the fiscal year ended September 30, 2011, which included an auditor's opinion that the statements were prepared in accordance with Generally Accepted Accounting Principles (GAAP). According to the audited financial statements, PVA incurred joint costs of $68,058,301 for informational materials and activities that include fund raising expenses. Of this amount, $32,849,895 was allocated to program service expenses, $30,796,784 was allocated to fund raising expenses, and $4,411,622 was allocated to administrative expenses.

Based on an evaluation of sample PVA appeals, the BBB Wise Giving Alliance disagrees with the allocation of $32,849,895 of direct mail appeals to the program service category. The Alliance is of the opinion that the contents of the direct mail appeals do not substantiate 48% of the cost of direct mail appeals to program service expenses. A significant portion of the content of the appeals could be considered fund raising, as it explains why one should donate to PVA rather than fulfilling a programmatic or administrative function.

Depending on how one recognizes PVA's direct mail expenses, its fund raising costs could be higher than the 23% of related contributions that was reported by PVA and its program services could be lower than 71% of total expenses also reported by PVA. Since the Alliance disagrees with PVA's joint cost allocations, we are unable to determine whether the organization meets Standards 8 and 9, which address fundraising and program expenses.

The BBB Wise Giving Alliance requested but did not receive complete information from the organization and is unable to verify the organization's compliance with the following Standard(s) for Charity Accountability: 8, 9

Paralyzed Veterans of America meets the remaining 17 Standards for Charity Accountability.

Purpose

  • Year, State Incorporated

    1946, Delaware

  • Affiliates

    801 18th Street Associates Limited Partnership
    Paralysis Society of America
    Paralyzed Veterans of America Spinal Cord Injury Education and Training Foundation, Inc.
    Paralyzed Veterans of America Spinal Cord Research Foundation
    PVA Outdoor Recreation Heritage Fund

  • Stated Purpose

    "to preserve the great and basic truths and enduring principles on which this Nation was founded; to form a national association for the benefit of individuals who have suffered injuries or diseases of the spinal cord; to acquaint the public with the needs and problems of paraplegics; to promote medical research in the several fields connected with injuries and diseases of the spinal cord, including research in neurosurgery and orthopedics and in genitourinary and orthopedic appliances; and to advocate and foster complete and effective reconditioning programs for paraplegics, including a thorough physical reconditioning program, physiotherapy, competent walking instructions, adequate guidance (both vocational and educational), academic and vocational education (both in hospitals and in educational institutions), psychological orientation and readjustment to thmily and friends, and occupational therapy (both functional and diversional)."

Programs

PVA aims to address the needs of its members and all veterans with spinal cord dysfunction (SCD). Through its network of National Service Offices, the PVA Veterans Benefits Department represents veterans nationwide and in Puerto Rico. PVA’s attorneys represent veterans at the U.S. Court of Appeals for the Federal Circuit, the U.S. Court of Appeals for Veterans Claims, and other appellate courts regarding veterans' benefits claims. PVA also operates the PVA Research Foundation, a private source of funding for neuroscientific research that supports clinical research for new treatment programs. The PVA Education Foundation offers ongoing training for health professionals who provide care for those with SCD. PVA sponsors several sporting events for wheelchair athletes. PVA also publishes a monthly magazine, "PN/Paraplegia News" and a sports magazine "Sports 'n Spokes." Some ($32,849,895 or 37%) of PVA's public education program is conducted in conjunction with informational materials that include fund raising appeals. In addition, a portion ($4,411,622 or 54%) of PVA's general and administrative costs are also conducted in conjunction with these fund raising appeals.

Veterans and disability services 21,260,222
Public education 89,248,801
Advocacy 2,462,407
Sports and recreation 3,414,119
Research, consumer and professional education 3,835,671
Chapter and community outreach 7,215,465
Total Program Expenses: $127,436,685

Governance & Staff

  • Chief Executive

    Homer Townsend, Executive Director

  • Compensation*

    $213,023

  • Chair of the Board

    William Lawson

  • Chair's Profession / Business Affiliation

    Member, Paralyzed Veterans of America

  • Board Size

    33

  • Paid Staff Size

    270

*2010 compensation includes annual salary and, if applicable, benefit plans, expense accounts, and other allowances.

Fund Raising

Method(s) Used:

PVA incurred joint costs of $68,058,301 for informational materials and activities that included fund raising materials. Of those costs $32,849,895 was allocated to program expenses, $30,796,784 was allocated to fund raising expenses, and $4,411,622 was allocated to administrative expenses.
Because the Alliance disagrees with the allocation of joint-costs in fund raising appeals we are unable to determine fund raising costs as a percentage of related contributions. For more information, please see the evaluation conclusions section.

Tax Status

This organization is tax-exempt under section 501(c)(3) of the Internal Revenue Code. It is eligible to receive contributions deductible as charitable donations for federal income tax purposes.

Financial

The following information is based on PVA's audited financial statements - consolidated for the fiscal year ended September 30, 2011.

Source of Funds
Public contributions 100,153,001
Contributed services 55,831,131
Legacy and bequests 4,555,639
Investment income 2,023,955
Other income 1,907,876
PVA publications 321,606
Total Income $164,793,208
  • Programs: 74%
  • Fundraising: 21%
  • Administrative: 5%
Total Income $164,793,208
Program expenses 127,436,685
Fundraising expenses $36,032,504
Administrative expenses $7,809,503
Total expenses: $171,278,692
Expenses in Excess of Income (-6,485,484)
Beginning Net Assets 37,371,761
Ending Net Assets 30,886,277
Total Liabilities 22,043,391
Total Assets 52,929,668

Note 1: According to audited financial statements for the year ended September 30, 2011, PVA received $55,831,131 of in-kind revenue, which includes public service announcements ($53,678,254), other contributions ($1,042,069), space and equipment ($864,059), and volunteer services ($246,749). Note 2: Because the Alliance disagrees with PVA's allocation of joint-costs in fund raising appeals, depending on how one recognizes PVA's direct mail expenses, its fund raising costs could be higher than the 23% of related contributions that was reported by PVA and its program services could be lower than 71% of total expenses. For more information, please see the evaluation conclusions section.

An organization may change its practices at any time without notice. A copy of this report has been shared with the organization prior to publication. It is not intended to recommend or deprecate, and is furnished solely to assist you in exercising your own judgment. If the report is about a charity and states the charity meets or does not meet the Standards for Charity Accountability, it reflects the results of an evaluation of information and materials provided voluntarily by the charity. The name Better Business Bureau is a registered service mark of the Council of Better Business Bureaus, Inc.

This report is not to be used for fund raising or promotional purposes.