CharityWatch is unable to provide a letter grade rating of Paws for Purple Hearts (Paws) at this time. Paws has declined to respond to CharityWatch's inquiries about its fiscal 2019 reporting of program expenses that may include fundraising activities. For this reason, we have issued Paws a "?" rating for its fiscal year-ended 12/31/2019. CharityWatch previously issued Paws a "?" rating for its fiscal year-ended 12/31/2017 for the same reason.
CharityWatch's most recent letter grade rating of Paws was an "F" for spending 26% of its budget on programs and $44 to raise each $100 of contributions in its 2015 fiscal year.
CharityWatch sent an inquiry to Paws' Chief Operating Officer, Dave Platte, in September of 2018 asking for an explanation regarding certain variances in Paws' program expense reporting in 2017 compared to 2016 & 2015. In October of 2018, Mr. Platte responded that he was working to provide CharityWatch with "thorough responses...as soon as I can." When a response wasn't received, CharityWatch re-sent its inquiry to Mr. Platte in February of 2019. On March 1, 2019, Mr. Platte responded that Paws is "going to have to decline the opportunity to provide a detailed response" to CharityWatch's inquiry.
In our 2018/2019 inquiry to Paws, CharityWatch asked the following:
"CharityWatch...has noted that Paws did not report expenses related to joint costs from a combined educational campaign and fundraising solicitation. Paws, however, has reported a significantly higher amount of 'Postage' and 'Printing and copying' expenses in Program Services since 2015, especially in 2017. Additionally, Paws allocated almost 60% of its 'Mailing lists' expenses to Program Services in 2017. Such expense reporting is typical for charities that have joint cost direct mail solicitation fundraising activity.
"...[I]f it is correct that Paws did not have joint cost solicitation activity in 2017:
"(1) Please provide CharityWatch with an explanation as to why the 'Postage,' 'Printing and copying,' and 'Mailing lists' expenses Paws allocates to Program Services per its 2017 audited Statement of Functional Expenses should be considered pure programmatic expenses and not joint costs. (Those three expense line items combined make up almost 30% of Paws' total reported program expenses in 2017. In contrast, they comprised 17% and 23% of total program expenses in 2015 and 2016, respectively.)
"(2) Please provide CharityWatch with further detail concerning the 'Professional services' Paws allocates to Program Services in 2017. What type of service(s), specifically, were provided for that $540,804 in total program expenses? Please provide a breakdown of the services provided with corresponding dollar amounts. (Similar to the expense items noted in (1) above, 'Professional services' comprised less than 5% of total program expenses in 2015, but that proportion increased to 12% in 2016 and 14% in 2017.)"
CharityWatch sent a similar inquiry to Mr. Platte on September 10, 2021. We communicated that the purpose of our inquiry was to attempt to discern whether Paws fundamentally changed its operations in a way that caused a dramatic reported financial efficiency improvement, or rather if Paws is simply reporting the same activities in a more favorable light in its tax form and audited financial statements. For example, in 2019 Paws allocated approximately 53% of its "Mailing lists" expenses to program services, as compared to certain prior years when this expense was allocated 100% to fundraising. About 30% of Paws' reported program spending in 2019 consisted of expenses for postage, printing and copying, mailing lists, and professional services.
In an email dated September 15, 2021, Mr. Platte responded: "We simply do not have the resources to chase this issue around again as we have in the past, so we'll have to settle for the '?' rating for 2019."
It is important to note that neither Mr. Platte nor anyone else at Paws has provided CharityWatch with responses to our questions about the charity's financial reporting. For this reason, Mr. Platte's statement, "as we have in the past," is not referring to Paws actually providing an explanation to CharityWatch about what accounts for its claimed financial efficiency improvements in fiscal years 2017 and 2019.