Opinion: Who’s to Blame When Bad Reporting Devastates a Good Charity?

A reporter uncovers a shocking charity scandal. The story sparks a nationwide outrage, leading to dozens of firings and a loss of millions in donations. Later, we learn that the reporting was flawed. There was no mismanagement after all. The media got the story wrong.

Who’s to blame for the tainted reputation, the loss of donations and the harm to the charity’s mission?

I’m describing Wounded Warrior Project (WWP), of course. Last year, The New York Times (NYT) and CBS News painted a very ugly picture of the veterans charity. The high-profile criticism was devastating, with nearly 100 employees fired, nine offices closed and up to $200 million in donations lost.

Last week, the Better Business Bureau (BBB) Wise Giving Alliance announced the results of an in-depth review of WWP. BBB Wise Giving Alliance found “no evidence of lavish spending” and gave WWP its highest rating. Three other investigations have also cleared WWP of wrongdoing.

Despite the evidence, though, the NYT and CBS have been silent. After their misleading stories brought WWP to its knees, there’s been no retraction or follow-up.

Which brings us back to our main question: who’s to blame?

There's plenty to go around. The obvious answer is the media. Today’s news is driven by clicks and ratings, incentivizing media outlets to inflame—not inform. A shocking headline is worth much more than a balanced investigation. In its WWP coverage, the media misconstrued important work and did a great disservice to the veterans community. Then there's the self-inflicted damage from WWP's board who failed big time as the criticism escalated. And while their work was praiseworthy in many ways, it would be like turning a blind eye to absolve WWP management completely. Optics are important.

But, there’s another less obvious culprit here: the charity sector itself. The sector has done a lousy job standing up for itself and educating the public about its work. We’ve allowed counterproductive ideas to persist for far too long.

For example, the NYT and CBS hammered WWP for spending too much on fundraising and overhead. For years, we’ve known that underinvesting in overhead is detrimental to impact and effectiveness. Experts now refer to it as the “overhead myth”—the false idea that low overhead indicates high performance. In reality, there’s tremendous value in talent, infrastructure and fundraising.

And, yet, charities still flaunt low overhead ratios to keep donations flowing. We further reinforce misconceptions by deferring to watchdog ratings that don’t actually measure social impact. By succumbing to the pressure of the “overhead myth,” we’ve ingrained in our society a set of fundamentally flawed assumptions about charity. The Ford Foundation has called this a “charade with terrible consequences.”

A journalist might conduct 50 interviews as he or she investigates an alleged charity scandal, but they won’t reveal the truth if everybody’s understanding of charity is based on a broken paradigm. Imagine if a journalist could travel back to the 1500s and interview people about Nicolaus Copernicus. They’d tell you he’s nuts! All their statements would support geocentrism (even though the heliocentric model was correct all along).

It’s unreasonable to expect top-notch coverage of charities when misguided attitudes are so prevalent across charity ratings, grant policies and legislation. The sector needs to begin standing up for itself, challenging misconceptions and demanding better from the major levers in the charity sector (i.e. foundations, watchdogs, media and government).

That’s exactly what we’ve set out to do at the Charity Defense Council. Our purpose is to correct misconceptions about charity and change the way the public thinks about changing the world. A TED Talk by our founder Dan Pallotta says it best.

As we see it, there are two choices: (1) to keep up the “charade” and accept the unintended consequences or (2) start confronting counterproductive thinking. We’ve chosen the latter.

So in the end, are we dealing with malicious reporting, or is a misinformed media the result of our own acquiescence to the “overhead myth”? The media shouldn’t be let off the hook, especially when they’ve caused so much undeserved damage—but, if we’re being totally honest, the answer lies somewhere in the middle.

If the media insists on scandals, let’s make sure the scandals are legitimate and the investigations are asking the right questions.

Social progress depends on it.

Disclosure: WWP provided seed funding of $150,000 to Charity Defense Council in 2014. Steve Nardizzi, former CEO of WWP, sits on the advisory board of Charity Defense Council.