June 18, 2019

Funding Flows in the Sea of Goodwill

An Analysis of Major Funders in the Veteran-Serving Nonprofit Space

By Emma Moore, Margaret Seymour, Jared Stefani, Kelly Kennedy and Kayla M. Williams

Introduction

Analyzing the largest organizations in the veteran philanthropy space through publicly available tax filings and annual reports, this paper identifies: (1) the dominant funders in the space and (2) the services and programs these organizations provide and fund. Through analysis of publicly available nonprofit tax documents and annual reports, as well as publicly shared information about corporate and foundation giving to veteran-serving non-profits, this report examines their grantmaking activities. The report demonstrates the significant impact that major funders have in this space and captures trends in the categories of benefits and programming that currently are being funded, as well as areas receiving limited support. Veteran-serving nonprofits, foundations, and corporate funders will benefit from a broad overview of the current state of funding flows as they consider how to direct funding and services moving forward. Subsequent research should include a nationwide needs assessment of the veteran community; pairing an understanding of the deepest needs among this population with this assessment of where resources are flowing would allow optimization in alignment of needs and resources.

Among this paper’s most significant findings are the following:

  • Veteran-service organizations (VSOs) with chapters tend to focus on funding them, while nonprofits with broad missions are more diverse in their giving and tend to donate at higher rates.
  • Following funding to general services, the specific categories that received the most funding were spouse and family, sport/recreation, healthcare, finances, and housing.
  • Research, unclarified grants, transportation, legal services, and civic action received the smallest percentages of funding.
  • California boasts both the highest percentage of veterans by state and the highest funding levels from chapter-based veterans service organizations. While Oklahoma, Illinois, Massachusetts, and Wisconsin have far lower percentages of the nation’s veterans, these states received the next highest funding levels.
  • In the corporate world, much of the funding went toward helping train veterans or their families for future employment, as well as to helping them get jobs. Now that veteran unemployment is down to 3.8 percent, such funding might be better used elsewhere.
  • Private foundations are more likely to fund rehabilitative services, caregiver support, research into medical issues, and groups that provide peer support—particularly if the foundations have clear mission priorities that include healthcare or veterans.
  • The largest organizations maintain their monopoly on congressional agenda-setting with regard to veteran services provided by the government through the use of advocacy and lobbying.
  • Larger and more prosperous organizations tend to offer more grant assistance in addition to funding research institutions and smaller organizations that offer specific services.
  • Numerically, most grants were awarded to chapters and auxiliaries of chapter-based VSOs, while most funding was allocated to unspecified other grants and services.
  • The number of grants awarded does not align with the funding level allotted to specific services; general services receive the most funding but a small fraction of the number of grants awarded.

Several caveats limit this research, including: a large percentage of programming provided under the umbrella of “general services” could not be categorized; many grants have dual purposes; and corporations and individuals are under no obligation to disclose donations, preventing systematic analysis of those funding flows.

The next section provides a brief background on trends in the veteran-serving nonprofits space and previous research. The second section details the methodology used to code the grantmaking activities of selected nonprofits by analyzing their tax filings and annual reports, as well as that used to assess the giving of corporations and foundations. The third section presents trends in grants and services among veteran-serving nonprofits. Based on tax filings, it highlights the largest ten funders separately due to their dominance in the sector, delves into grants and funding to chapters and by category of service, and assesses funding flows by state; then cross-checks this data with an overview of what organizations self-report in their annual reports. The fourth section presents trends in corporate and foundation giving based on publicly-available information from and about major donors. To provide additional context on the types of organizations operating in this eco-system, the fifth section highlights four types of funders in greater detail. The final section provides high-level conclusions about these trends.

Background

As the United States completes its second decade at war, the country’s veteran community and veteran-serving nonprofit landscape continues to change in accordance with shifting demographics. The Department of Defense reports a total 1.3 million active-duty service members and 800,000 Reserve forces.1 Of the 2.1 million serving, approximately 250,000 separate from the military each year, joining the 20 million veterans who live throughout the United States.2 However, this population is shrinking dramatically, as previous cohorts from the World War II, Korea, and Vietnam eras pass. It is projected to decline to 13.6 million by 2037.3 The shrinking veteran population is also changing and will require a distinct set of services and support.

Veterans from the All-Volunteer Force era, specifically Gulf War–era veterans, will increasingly come to dominate the landscape in the next few decades. Not only will Gulf War–era veterans be a larger percentage of the veteran population and the first fully-professionalized cohort, these veterans are increasingly diverse both ethnically and racially, more female, and more likely to have been married while serving.4 Additionally, a higher percent of post-9/11 veterans file claims for disability compensation than veterans of earlier conflicts, and those who do so cite a larger number of issues.5 Veterans are also transitioning back into a society that has seen marked changes in community engagement by comparison with previous generations.6 Accordingly, the veteran-serving nonprofit and philanthropy market, which serves a reduced veteran population and has already been impacted by changing veteran demo-graphics, must continue adapting to shifting needs in the space by continually adjusting the services provided.

Organizations providing critical support to veterans have existed throughout much of the history of the United States, often founded in the wake of major conflicts: Veterans of Foreign Wars (VFW) dates its history to 1899 in the aftermath of the Spanish-American War and Philippine Insurrection; The American Legion (1919) and Disabled American Veterans (DAV, 1920) were formed after World War I; Paralyzed Veterans of America (PVA, 1946) and American Veterans (AMVETS, 1944) were founded after World War II; and Vietnam Veterans of America (VVA) was eponymously formed in 1978. The post-9/11 era has been no different, resulting in Iraq and Afghanistan Veterans of America (IAVA, 2004), Wounded Warrior Project (WWP, 2003), and other more modern organizations. However, groups founded pre-9/11 still largely dominate the market financially and influentially. Newer organizations are making their mark, boasting distinct models of community engagement, fundraising, and programming compared with earlier veteran-serving nonprofits.7 Veterans themselves are demanding a different collection of services and style of engagement than have previous generations, and newer organizations have carved out roles alongside legacy organizations to serve veterans’ needs and advocate for specific legislative and policy changes.8

A higher percent of post-9/11 veterans file claims for disability compensation than veterans of earlier conflicts, and those who do so cite a larger number of issues.

Legacy and newer organizations both provide vital services and support to this community. The so-called “sea of goodwill” of nonprofits serving veterans has supported this community for decades, supplementing and collaborating with the government and providing services locally across the nation. Responding to the perceived needs of veterans has been a key part of their focus and organizational makeup; having the resources to provide those services is foundational to the mission. Coordination between the public sector, private companies, and nonprofits has resulted in significant progress in addressing veteran unemployment and homelessness, which have both declined dramatically in recent years.9

Because of veteran-serving nonprofits’ large constituencies and the government’s reliance on them to fill gaps in service, these organizations have developed immense power, influence, and funding. Historically, the legislative power of congressionally chartered VSOs has made significant strides in supporting veterans.10 These nonprofits also serve as vocal critics of government programs that are not providing adequate services. Their representatives often testify at congressional hearings, citing concerns that their members, associations, and affiliates have at all levels—local, regional, and national. As a result, these organizations influence the VA’s annual budget decisions, impact legislative action taken by the Senate and House Veteran Affairs Committees, and draw attention to veterans’ issues.11 Far less clear is the tangible impact of services provided by organizations with the loudest voices and the biggest budgets.

Figure 1. Funding Flows in the Veteran-Serving Nonprofit Ecosystem

While congressionally chartered VSOs have long dominated the veteran philanthropy space by providing services directly to veterans, influencing policy, and operating as grant making institutions, many other organizations also serve veterans. The “Big 6” historically dominant VSOs – The American Legion, AMVETS, DAV, PVA, VFW, and VVA – are known to provide services and award grants. Numerous other large organizations who also provide direct services and fund veteran causes, including newer organizations founded post-9/11 have also quickly become influencers in the veteran nonprofit ecosystem, capitalizing on their social media presence and support from members to push legislative agendas.12

As the size of the veteran population shrinks and desired services shift, the nonprofit and philanthropic communities must prepare to carefully prioritize which needs to meet and how to resource programs. Understanding what needs in the veteran space are currently being supported is a crucial step that builds toward the long-term goal of identifying gaps that should be filled and aligning programming to fill them. In the veteran philanthropy market, the largest organizations with the most funding have an outsized impact on the space as well as on the veterans; therefore, trends in these organizations’ funding and services are key to understanding the market as a whole.

Past work has attempted to develop frameworks for comparing the vast number of veteran-serving non-profits. Organizations have developed taxonomies to determine which types of services are provided in the philanthropy ecosystem. Due to the wide variety of programs, classification is critical to evaluating the space. Many nonprofits, for instance, focus on providing direct services pertaining to employment and education, mental health, and housing. In comparison, organizations with nationwide chapters offer benefits assistance and fraternal networks, and set their legislative agenda based on expansive networks. In 2012, the Institute for Veterans and Military Families (IVMF) attempted to map collaborative work by military and veteran-serving organizations and established a blueprint for assessing network and benefit types.13 IVMF’s analysis of collaborating organizations found that most organizations focus on education, employment, health, or housing.14

Understanding what needs in the veteran space are currently being supported is a crucial step that builds toward the long-term goal of identifying gaps that should be filled and aligning programming to fill them.

In assessing veteran-serving philanthropy, this report builds on the 2015 Center for a New American Security (CNAS) report “Charting the Sea of Goodwill,” which examined the landscape of veterans nonprofits through the lens of their tax filings, and the 2018 follow-on working paper “Changing Tides in the Sea of Goodwill: A Financial Analysis of Veteran-Serving Nonprofits,” which applied a business analysis to identify significant fiscal attributes of the market.15 CNAS now aims to move beyond financial analysis to identify the services and programs currently provided.

Funding streams are likely to shift as the veteran population shrinks and organizations built on large member bases adapt. How funders prioritize services will have a ripple effect on the community as a whole: as Figure 1 illustrates, the veteran-serving nonprofit market has overlapping funding streams and interaction between large and small groups; as this paper will demonstrate, the largest organizations play an outsized role due to their financial dominance.

This report focuses on capturing trends in funding of chapters, programs, and services by larger organizations At first glance, this is an immense space, totaling 38,000 organizations that serve veterans.16 However, only 153 have an annual revenue greater than $1 million, and 59 percent of revenue in the market is attributed to six organizations with the largest annual revenue.17 Previous work by GuideStar, a platform that reports on charitable organizations based on tax data, examined veteran-serving organizations and found that 65 percent are posts or chapters; 18 percent are charitable; and 17 percent fall into other categories of giving.18

Because of the wide array of veteran-serving organizations, a comprehensive analysis is all but impossible. Therefore, this report prioritizes high revenue organizations to examine a subset of them by expenditure based on the Internal Revenue Service’s (IRS’s) tax form 990 and self-published annual reports, as well as publicly available information from private companies and foundations. The examination of nonprofit operations is an area with few well-marked boundaries and definitions outside of tax reports. This report offers an important first step in a discussion of how veteran-focused philanthropy can identify and classify programs and grants. The following section explains the data and methodology used for the analysis presented in the remainder of the report.

Read the full report.

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Endnotes

  1. “Military Active-Duty Personnel, Civilians by State,” Governing, September 30, 2017, http://www.governing.com/gov-data/public-workforce-salaries/military-civilian-active-duty-employee-workforce-numbers-by-state.html.
  2. United States Census Bureau, “U.S. and World Population Clock,” https://www.census.gov/popclock/.
  3. U.S. Department of Veterans Affairs, “Veteran Population Projections, 2017–2037” 2016 (henceforth VetPop2016), https://www.va.gov/vetdata/docs/demographics/new_vetpop_model/vetpop_infographic_final31.pdf.
  4. The percentage of minority veterans will increase to 32.8 percent from 23.2 percent by 2017: U.S. Department of Veterans Affairs, VetPop2016.
  5. Marilynn Marchione, “Almost Half of New Veterans Seek Disability Benefits,” Associated Press, May 28, 2012, https://www.bostonglobe.com/news/nation/2012/05/27/almost-half-new-veterans-seek-disability-benefits/sYQAAY00ddXBRoqfsKMheJ/story.html.
  6. For an overview of trends in social capital, see Chayenne Polimédio, “Can We Rebuild Community in an Age of Division,” Pacific Standard, October 10, 2018, https://psmag.com/social-justice/bringing-back-the-community.
  7. Douglas McCormick, Emma Moore, and Andrew Swick, “Changing Tides in the Sea of Goodwill: A Financial Analysis of Veteran-Serving Nonprofits” (Center for a New American Security, October 23, 2018), https://www.cnas.org/publications/reports/changing-tides-in-the-sea-of-goodwill-a-financial-analysis-of-veteran-serving-nonprofits.
  8. See, for example, Team RWB (Red, White, and Blue), https://www.teamrwb.org/; and Jon Anderson, “Vision for a New VFW: The Story of Denver’s Post 1,” Military Times, July 18, 2015, https://www.militarytimes.com/veterans/2015/07/18/vision-for-a-new-vfw-the-story-of-denver-s-post-1/.
  9. “Employment Situation of Veterans Summary,” Bureau of Labor Statistics, U.S. Department of Labor, Economic News Release, March 21, 2019, https://www.bls.gov/news.release/vet.nr0.htm. U.S. Department of Veterans Affairs, “Ending Veteran Homelessness,” February 21, 2019, https://www.va.gov/homeless/endingvetshomelessness.asp.
  10. U.S. Department of Veterans Affairs, “Veterans and Military Service Organizations,” 2017 Directory, https://www.va.gov/vso/VSO-Directory.pdf.
  11. U.S. Department of Veterans Affairs, “Department of Veterans Affairs, Budget in Brief,” 2019 Congressional Submission, https://www.va.gov/budget/docs/summary/fy2019VAbudgetInBrief.pdf. Sara Jahnke, Christopher Haddock, Walker Carlos Poston, and Nattinee Jitnarin, “Priorities of Legislatively Active Veteran-Services Organizations: A Content Analysis and Review for Health Promotion Initiatives” Military Medicine, 179 no. 11 (November 2014), 1331–38, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4276034/.
  12. For example, IAVA has an annual “Storm the Hill” campaign of meetings with members of Congress to influence legislation; Student Veterans of America (SVA) focuses on advancing policy change to support educational attainment for veterans; and WWP, the largest organization founded post-9/11, has a wide set of policy priorities and sits at the table with the Big 6.
  13. Nicholas Armstrong, Ryan Van Slyke, Michelle Isbester, and Bonnie Chapman, “Mapping Collaboration in Veterans and Military Family Services” (Institute for Veterans and Military Families, June 2016), https://ivmf.syracuse.edu/wp-content/uploads/2016/06/MappingCollaborationInVeteransAndMilitaryFamilyServices_accesible.pdf.
  14. Armstrong, Slyke, Isbester, Chapman, “Mapping Collaboration in Veterans and Military Family Services,” 4.
  15. Katherine Kidder and Phillip Carter, “Charting the Sea of Goodwill” (CNAS, December 9, 2015). https://www.cnas.org/publications/reports/charting-the-sea-of-good-will. McCormick, Moore, and Swick, “Changing Tides in the Sea of Goodwill.”
  16. McCormick, Moore, and Swick, “Changing Tides in the Sea of Goodwill,” 4.
  17. McCormick, Moore, and Swick, “Changing Tides in the Sea of Goodwill,” 5.
  18. GuideStar, “U.S. Veterans’ Organizations by the Numbers” (November 2015), 2, https://learn.guidestar.org/hubfs/Docs/us-veterans-orgs-by-the-numbers.pdf.
  • Emma Moore

    Research Assistant, Military, Veterans, and Security Program

    Emma Moore is a Research Assistant for the Military, Veterans, and Security Program at the Center for a New American Security (CNAS). Prior to joining CNAS, Moore served as E...

  • Margaret Seymour

    Adjunct Research Assistant

    Margaret Seymour, with a PhD in International Studies from Old Dominion University, is now studying journalism and strategic communications at the University of Missouri. Her ...

  • Jared Stefani

    Former Research Intern, Military, Veterans, and Society Program

    Jared Stefani is a former Joseph S. Nye, Jr. Intern for the Military, Veterans, and Society Program at the Center for a New American Security (CNAS). Jared is an active duty A...

  • Kelly Kennedy

    Independent Researcher

    Kelly Kennedy served in the U.S. Army from 1987 to 1993, including tours in the Middle East during Desert Storm and in Mogadishu, Somalia. She has worked as a health policy re...

  • Kayla M. Williams

    Senior Fellow and Director, Military, Veterans, and Society Program

    Kayla M. Williams is a Senior Fellow and Director of the Military, Veterans, and Society Program at the Center for a New American Security (CNAS). She previously served as Dir...

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