EMAIL FROM LEGAL COUNSEL FOR DVNF to CNN/TURNER BROADCASTING
From: Errol Copilevitz
Date: May 25, 2012 2:39:43 PM EDT
To: Fitzpatrick, David
Subject: DVNF

I am acting as legal counsel to the Disabled Veterans National Foundation to assist them in responding to the Senate Finance Committee. My purpose in contacting you is to ask CNN to discontinue showing the video of Board Chairperson Precilla Wilkewitz at her place of employment with the VFW. She performs no services for DVNF while working for VFW. The VFW is not involved in your story. As a result of the use of the video Ms. Wilkewitz continues to receive threats of physical injury, and , or death. The use of video spikes these outrageous reactions. Ms. Wilkewitz serves as a volunteer who has dedicated her life to serving our country and the veteran community. She does not deserve to be treated in this manner by any stretch of anyone’s imagination. I am sure you would agree. Again, please discontinue the use of the video showing Ms. Wilkewitz . It is the right thing to do. Thank you in advance for honoring this request.

I expect to be able to meet the deadline for the production of materials that the Senate Finance Committee has requested. I am confident they will show that significant programs were created and conducted by the organization.

DVNF 2010 Communication to CNN

To better assist you in understanding the path our organization has taken, enclosed are some documents which I hope you will review. These documents consist of our 2009 IRS Form 990 and our most recent financial statement. Also included are two articles written by Professor Richard Steinberg, who currently serves as a Professor of Economics, Philanthropic Studies, and Public Affairs at Indiana University Purdue University at Indianapolis.

We are perplexed that you would go forward with any such report without talking to Professor Richard Steinberg, and, or author Dan Pallotta, who is also a contributor to Harvard Business Review. These are two of the foremost authorities in this country on the controversial theory of fundraising efficiency. If you truly are seeking an objective analysis, then talk to experts with more credentials than those of AIP.

Disabled Veterans National Foundation (DVNF) is a relatively new organization facing the difficult process of acquiring a donor base. It should not surprise you or your viewers that in the world of charitable fundraising donor acquisition is a particularly difficult and costly process. The challenge we now face is heightened by the state of our nation’s economy.

The issue of the propriety of high fundraising costs is not a new one. Indeed, on two separate occasions, the United States Supreme Court (according to our legal counsel) reviewed the issue of high fundraising costs and the attempt to relate them with misrepresentation to potential donors. I would urge you to review the cases of Riley v. National Federation of the Blind of North Carolina, Inc., 487 U.S. 780 (1988) and Madigan v. Telemarketing Associates, Inc., et al, 538 U.S. 600 (2003).

The volunteer board of directors of DVNF decided to adopt a unique strategy to acquire a major donor base in the shortest possible time. It was theorized that by going through the painful process of donor acquisition early we could reach our goal of financial efficiency sooner than had we gone down a traditional path. We were fortunate to attract vendors and consultants who shared our vision, and were willing to invest their resources because of their confidence in our mission.

In March 2010, the board of directors commissioned Professor Steinberg to do an analysis to determine whether our approach was working. On page 5 of his analysis, he stated in part (referring to the fact that the campaign lost money in 2008):

This does not concern me, as aggressive donor acquisition campaigns frequently lose money and DVNF was in its first year of operations. The house file brought in donations of $3,558,417 on expenditures of $3,248,079, actually making money in the first year. The house file in 2009 brought in donations of $10,160,314 on expenditures of $7,414,522.This would not have been possible without the 2008 acquisition expenditures, and in one year effectively covers the combined loss of the 2008 campaign. It is more complicated than that, because some people in the 2009 house file entered because of 2009 acquisition expenditures.Donors first brought in during 2008 will continue to give in 2010, 2011, and thereafter, so that the numbers to date strongly suggest that the 2008 investment will prove profitable.

I would also direct you to page 3 of the financial statement, as well as page 10 of the accompanying 990. Both will show that in 2009 our organization spent $8,430,490 on program service. Our 990 also reflects that our costs for management in general were approximately 7%. If you are going to talk about numbers in your report, we would ask that you include these as well.

Your question refers to “professional fundraising organizations,” but the reality is that DVNF does not employ any professional fundraisers. Brickmill is registered as a fundraising consultant, which is a category distinctly different from a “professional fundraiser.” Quadriga is simply a vendor for services, providing printing and production assistance. To categorize either as “professional fundraisers” would be wrong.

We strongly believe the path we are taking will be successful. You tend to view our organization and take a snapshot of where we are currently, while we look at the entire process as a feature length film. Once a donor has been acquired there is a residual value. See the enclosure, “The Lifetime Value of Donors to DVNF,” by Professor Steinberg.

Nonprofit accounting, unlike for-profit accounting, does not attribute a value to inventory. We believe the value of our donor file will, over the next several years, reverse our trend and result in much lower fundraising costs. A donor once acquired is more likely to support our organization in the future, and some will even consider us when doing estate planning.

We would ask that you tell your viewers that if they wish to support DVNF and be assured that no portion of their donation will go to the cost of fundraising or to administration, they can send their donation directly to our office at: 1020 19^th Street NW, Suite 475, Washington, DC 20036, with our promise to them that 100% will be spent on program service. Our goal has been and continues to be to develop our organization into a major veterans’ support charity. We think we are on the path to accomplishing it.

I also hope that you and those who work with you will take the time to learn about the realities of fundraising by charitable organizations. We would suggest that you read the book “Uncharitable” by Dan Pallotta in addition to the noted court cases.

Charities play an important part in our society. DVNF is going through the difficult and expensive process of acquiring a major donor file. Our formula has been reviewed by experts and adopted by a truly independent board of directors. Our promise to you and your viewers is that we will continue to strive to become better.