Demanding That Nonprofits Not Pay for Overhead Is Preventing Them From Doing Good

Earlier this year, a series of bad press rocked the popular veterans organization Wounded Warrior Project (WWP). The New York Times' investigation found that while the organization raised an impressive $372 million in donations each year, a big chunk of that money wasn't going to veterans. Instead, the top executives were shelling out nearly 40 percent of the annual revenues to indulge business-class travel, expensive hotel stays, fanciful employee conferences and their own exorbitant salaries.

While WWP's expenses were laughably tone-deaf, the affair highlights a major issue in the world of nonprofit funding: When foundations or individuals donate to an organization, they often expect their money is going to triage the issue.