Another day. Another Barrett-Jackson controversy involving a president. This weekend the famous classic car auction helped raise $950,000 for a Marine veteran's project for wounded warriors. The only problem? The money isn't going to the highly-regarded charity, the Wounded Warrior Project (WWP).
Instead, Barrett-Jackson raised nearly a million dollars for the Wounded Warriors Family Support (WWFS) — a charity successfully sued by the Wounded Warrior Project for trying to convince donors they were the well-respected charity and accepted more than a million dollars in donations on their behalf.
And when John Folsom — the vet from the not-Wounded Warrior Project — took the stage at this weekend's Barrett-Jackson auction, he made sure to use it as an opportunity to tell everyone that the President of the United States is not an American. The crowd, predictably, cheered.
The non-profit Wounded Warrior Project is an exemplar charity founded in 2002 by a former Green Beret who was severely burned in a helicopter crash in Somalia. The mission of the organization is to help support wounded veterans and their families.
It's now a massive charity that brought in approximately $124 million last fiscal year, of which nearly $90 million went to programs.
The WWP is a Better Business Bureau-accredited charity that spends approximately 82% on programs and just 14% on fundraising and 4% on administrative costs.
Don't confuse it with the guy who auctioned off a Mustang this weekend.
In 2003, former Marine Colonel John Folsom founded the Wounded Warriors Hospital Fund in Germany to provide electronic equipment and chewing tobacco for wounded soldiers there.
According to to a summary in the judgment by the Eight Circuit U.S. Court of Appeals, the Wounded Warrior Project became concerned with Folsom's organization when he moved it to the United States, incorporated it as "Wounded Warrior, Inc." and bought the website woundedwarriors.org, which was almost identical to The WWP's woundedwarrior.org.
From the court documents:
The website was very similar to WWP's website, woundedwarrior.org. Folsom changed the website's color scheme and font and the text phraseology to mimic WWP's website. Folsom placed a disclaimer at the bottom of WWFS's new homepage in a difficult-to-read typeface with cream on white coloring. When giving money to WWP, donors would often write checks in shorthand to "Wounded Warriors."
During the lawsuit, a forensic accountant hired by WWP found that WWFS was making only $1,337 on average before the website went live. Afterwards, donations reached $87,895 per month.
The website was shut down, but a jury determined that the WWFS owed $425,000 to WWP because of a loss to its reputation and goodwill, and a whopping $1.27 million in misdirected donations. The WWFS appealed but the court denied their motion.
Despite being smacked down by the courts, the WWFS continues to operate. According to its most recent available IRS filing, Folsom's group took in about $1.2 million in donations, of which 6.3% went to salaries and employee benefits and roughly 32% went to "fundraising" costs (approximately $395,214).
Perhaps one reason their fundraising is so expensive is that it isn't very effective. Their IRS 990 form shows a fundraising event held at the USS Intrepid Museum where they grossed $124,980, but ended up spending $29,350 on facility costs and an absolutely insane $47,847 on food. So, after spending $77,197 on the event, they only netted $47,783.
In fact, if you look at their expense break-down they only spent $54,744 directly on "Soldier Support," approximately $8,000 less than they spent on legal and far less than the more than a million dollars they owed at the end of the fiscal year because of litigation.
Perhaps some of the money is tied up in the condos they own and let families of wounded soldiers use, but according to court documents they were only occupied by soldiers or WWFS staff approximately 30% of the time and used as rental properties the other 70% of the time.
From their most recent available IRS filing they appear to be tying up their money in paying staff, managing/building condos, and trying to raise more money that can be used to pay off their large legal liability. In their pursuit of more funds they've found an easy mark in the Barrett-Jackson crowd.
It's not even a particularly original idea. The Wounded Warrior Project already auctioned off a Camaro to raise money. The Wounded Warriors Family Support, of course, had to get a Mustang.
Colonel Folsom hit the jackpot this weekend when the sale of his group's 2011 Shelby GT500 netted $950,000 thanks to the first bidder who immediately re-donated it to auction again. Here's the account from the predictably uncritical SPEED report:
The red, white and blue Shelby, signed by dozens of veterans, families and supporters from all over the country, was hammered sold for $500,000 to a thunderous cheer from the auction crowd, which rose to a fevered pitch when the winner of the sale, Ronnie Rains of Odessa, Texas, donated the car back to be sold again.
With that, auctioneer Spanky Assister started his patter over again, with the second sale quickly reaching $450,000 and sold to Jack Miller, a Jupiter, Fla., collector and restorer of Ford Mustangs.
During the televised portion of the Barrett-Jackson auction this Saturday in Palm Beach, Colonel John Folsom climbed to the stage to thank everyone and, of course, like any good American, slipped in an attack on the Commander-in-Chief of the U.S. Armed Forces.
"We drove this 2011 Shelby 48 states, we have a lot of signatures," said Folsom on stage. "Someone asked me if I had the President's signature... but I have a lot of American signatures."
The nod to the "birther movement" — Americans naive or racist enough (or some mixture of both) to believe President Obama was actually born in Kenya (in some narratives as a secret Muslim) — clearly brought in lots of applause. A few people even stand to give an ovation.
People are entitled to their crazy opinions, but the Barrett-Jackson auction doesn't have to give them a microphone and an audience.
And people are entitled to raise money for organizations that, in the past, were sued by reputable charities and that are, according to their own financial filings, curiously inefficient with donor funds. They can give nearly a million dollars to an organization like Wounded Warriors Family Support that were, as of last available IRS records, more than $1.24 million in the hole.
But Barrett-Jackson doesn't have to give them a stage to raise that money. And they shouldn't. There are better charities. But what should we expect from an organization that has profited from information they know to be inaccurate — and then attacked those who point out the deceptive information.
It could be worse, though. At least we haven't seen any press releases from people who didn't spend money on the Shelby.
(Hat tip to @VeeArrrSix!)