Veterans Community Project: Financially Efficient but Lacks Transparency and Good Governance Policies

Veterans Community Project (VCP) is a charity that provides transitional housing to veterans in an effort to eliminate homelessness. It receives an “A” rating on CharityWatch’s “A+” to “F” rating scale for financial efficiency. In fiscal 2021 it spent 80% of its cash budget on its programs and a reasonable 20% on overhead. It cost the charity only $8 to raise each $100 of cash support.

Not a Top-Rated Charity

While Veterans Community Project is a financially efficient organization, its governance and transparency is sorely lacking. It does not make its audited financial statements available on its website and has not responded to multiple past requests from CharityWatch to disclose information about its finances. Because it fails CharityWatch’s benchmarks for governance and transparency it does not qualify for Top-Rated status.

Lacking Governance Policies

In its 2021 tax Form 990, Veterans Community Project reports that it:

·      Does not regularly and consistently monitor or enforce compliance with a written Conflict of Interest policy.

 

·      Does not require annual disclosure by its officers, directors, and key staff interests that could give rise to conflicts.

 

·      Does not have a written Whistleblower Policy.

 

·      Does not have a written Document Retention and Destruction Policy.

                                                                                          

Transactions with Interested Persons

According to the Veterans Community Project (VCP) 2021 tax filing, VCP reports re: Transactions With Interested Persons (IRS Form 990, Schedule L, Part II) a loan from the organization to Bryan Meyer, "Officer.” The "Original principal amount" of the loan is reported as $44,600; the "Balance due" is $37,311, as of 12/31/2021. The "Purpose of the loan" is reported as "Support"; there is a written agreement for the loan, it is not in default, and it was "Approved by board or committee," according to VCP's fiscal 2021 tax Form 990, Schedule L.

[Bryan Meyer is also reported as "President of the Corporation", according to Form 990, Part VII.]

Joint Venture

Veterans Community Project responds “yes” to the question: “Did the organization invest in, contribute assets to, or participate in a joint venture or similar arrangement with a taxable entity during the year? With respect to this arrangement, Veterans Community Project reports in its 2021 tax Form 990 that it did not follow a written policy or procedure requiring the organization to evaluate its participation in joint venture arrangements under applicable federal law and take steps to safeguard the organization’s exempt status with respect to such arrangements.

In its 2021 Form 990, Schedule R, Veterans Community Project reports a related organization by the name of Bravo Bravo Que. VCP reports “cash paid” to Bravo Bravo Que in fiscal 2021 in the amount of $26,691 for “Loans or loan guarantees to or for related organization(s).”

According to its website, Bravo Bravo Que sells barbeque, Thai chilli, and other types of sauces. Also according to its website, “Bravo Bravo Que was created in collaboration with the Veterans who developed Veterans Community Project (VCP), an innovative housing solution to forever end Veteran homelessness…100% of Bravo Bravo Que’s profits go directly to VCP’s mission of providing homes with dignity and honorable services to help those who have fought bravely for our nation. VCP is unlike any other nonprofit and Bravo Bravo Que is unlike any other company. Most companies with a charitable benefit simply donate a portion of their revenues to a nonprofit. Because Bravo Bravo Que is entirely owned by VCP, we can guarantee every penny (outside of packaging costs) goes directly to ending Veteran homelessness.”

Donors should be cautious when reading charity marketing materials that suggest “100%” of profits or proceeds go to support a charitable cause. The term revenue refers to the total amount collected from the sales of a product or service. The terms “profit” or “proceeds,” on the other hand, refer to the money that is left over after operating and other overhead expenses are subtracted from revenue. If the costs of producing or packaging a product end up eating significantly into the revenue raised from selling that product, very little “profits” or “proceeds” may be left over to be used for any charitable purpose. If supporting a charitable cause is your primary motivation for purchasing a particular product, it is always a good idea to demand information about what specific dollar amount of the purchase price will be transferred to the charity, and the timing of when such a transfer will occur.

Because Veterans Community Project reports loaning $26,691 to Bravo Bravo Que in 2021, this could signal that initial sales of any products may be used to pay off the loan before any proceeds can be generated to be used for charitable purposes.

Financial Disclosure

CharityWatch contacted Veterans Community Project in February 2020 to request copies of its IRS Form 990 tax filing and audited financial statements. VCP did not respond to that request, but CharityWatch was eventually able to acquire copies of its tax filings from public sources. Among our concerns upon reviewing these documents:

• In its 2018 tax filing, VCP did not check the box to indicate that an independent audit was conducted that year. This is unusual for a charity of VCP’s size—it netted nearly $3 million in cash contributions in 2018. If it was the case that VCP solicited donations only in its home state of Missouri that year, an audit may not have been required to comply with state law. Whereas, if VCP solicited donations nationally, it likely did so in violation of various state charitable solicitation laws.

• In its 2017 and 2018 tax filings, VCP left blank the fields designated for a response to the following question: “List the States with which a copy of this Form 990 is required to be filed.” Forty-one U.S. states and/or jurisdictions require charities to register as a condition of being allowed to solicit charitable contributions within their borders. Many of these states require a copy of a charity’s IRS Form 990 to be included as part of meeting filing requirements. In February of 2020 when CharityWatch began our research into this organization, we were unable to locate a copy of VCP’s audit or Form 990 in the public databases of state charity regulators, calling into question whether VCP was properly registered to solicit donations in one or more jurisdictions.

CharityWatch emailed Veterans Community Project another request for copies of its financials on April 23, 2021 and mailed the same request via U.S. mail again on April 24, 2021. We mailed another request on April 8, 2022. Veterans Community Project did not respond to our requests.