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Thread: AER hoardes cash

  1. #1
    Council Member jkm_101_fso's Avatar
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    Default AER hoardes cash

    I guess we can stop pressuring our formations to donate to this...looks like they got enough to last a while.

    Army Charity Hoards Millions Meant to Help Veterans

    Between 2003 and 2007 -- as many military families dealt with long war deployments and increased numbers of home foreclosures -- Army Emergency Relief packed away $117 million into its own reserves while spending just $64 million on direct aid, tax records show.

    Associated Press
    Sunday, February 22, 2009


    As soldiers stream home from Iraq and Afghanistan, the biggest charity inside the U.S. military has been stockpiling tens of millions of dollars meant to help put returning fighters back on their feet, an Associated Press investigation shows.

    Between 2003 and 2007 -- as many military families dealt with long war deployments and increased numbers of home foreclosures -- Army Emergency Relief grew into a $345 million behemoth. During those years, the charity packed away $117 million into its own reserves while spending just $64 million on direct aid, according to an AP analysis of its tax records.

    Tax-exempt and legally separate from the military, AER projects a facade of independence but really operates under close Army control. The massive nonprofit -- funded predominantly by troops -- allows superiors to squeeze soldiers for contributions; forces struggling soldiers to repay loans -- sometimes delaying transfers and promotions; and too often violates its own rules by rewarding donors, such as giving free passes from physical training, the AP found.
    Story
    Sir, what the hell are we doing?

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    Default angry

    Just saw that story on drudge, and got really angry. I gave to AER because I saw it help Soldiers and families in my unit. It is advertised as Soldiers taking care of each other, which it is suppossed to do. I hope that they're not "hoarding" the money as the article suggests. If they're turning people down, or not creating programs just to grow an endowment, then they are wrong.

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  3. #3
    Council Member Ken White's Avatar
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    Default You may want to check that story out by talking to

    the local AER guy or gal at your posts. You can also look at this LINK and see what AER does with the money they loan and why there are not more grants.

    Chronic tales like that crop up in every war and most have some fact but also some misstatements. I recall one tale during Viet Nam that said AER charged 50% interest. At the time it was .5 percent. and it wasn't interest it was the recoupment fee. This one seems balanced but it really only produces one side of the story and very regrettably, I've come to distrust AP. Their ex-Gannet leader has messed up their objectivity pretty badly IMO.

    The rules may have changed but it used to be that Soldier requests for financial assistance went first to the Red Cross and then AER. That was true because the ARC donated $1M to help the AER get started during WW II and asked that they be given first option at loans. AER was thus, effectively, the lender of last resort

    I have had my disagreements with AER over treatment of troops -- but more often I have seen AER do some good things for Troops. A lot depends on the personality of the local rep and his attitude. The good new is in my experience if you get stiffed by one, you can raise a ruckus and get him or her replaced. All things considered, I've seen troops with good and bad experiences with AER (and the Red Cross) and I've never been anywhere that forced troops to give in the way the article contends is common. AER does great with their lending closet and their volunteers, they are very tight with grants because the Army wants them to be that way. With loans, they are reasonably liberal but they get sticky about repayment -- because the Army wants them to be that way.

    Can't speak to today but not long before I retired, I told a slew of folks that they were better off raping the CG's daughter than they would be ahving an overdue book from the Post Library and far better off than if they owed an overdue car payment. Hopefully, that's gotten better. Of course, the standard punishment for indebtedness was a fine or a reduction in rank...

    Hopefully that has changed and indebtedness is fixed and not punished.

    I'd also suggest you check CFC out and see where your money goes. Ostensibly, you can direct it but I discovered that direction is not always followed. After many years of watching, I ended up giving directly to the Red Cross and to AER in about equal amounts. Neither is perfect but both do a fair job and the Red Cross does good with the notification and military hospital volunteers

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    Please cut the fricken crap. This is classic woe-is-me, poor-downtrodden-exploited-Soldier, yellow journalism.

    Tax-exempt and legally separate from the military, AER projects a facade of independence but really operates under close Army control.
    Oh, what a scandal! Of course it does. Imagine what would happen if every Soldier who thinks that he needs an interest-free loan could just walk in there without AER verifying his need through the chain of command.

    The massive nonprofit -- funded predominantly by troops -- allows superiors to squeeze soldiers for contributions; forces struggling soldiers to repay loans
    "Forces" Soldiers to repay loans? Here is how I would word it: "generally hopes that the chain of command helps them to ensure that Soldiers repay their loans after they get themselves in debt by marrying a stripper who already has 3 kids from two previous fathers and then follows it up by spending every paycheck at the bar, club, used car lot, and class six." I can't count the number of times that I've seen some variation of that scenario.

    Look at the pay tables, the BAH and BAS rates, the number of months that Soldiers spend earning Save pay, Hostile Fire Pay, not paying income taxes, and having a dramatically reduced cost of living while deployed. Free health care, free dental, cheap life insurance, tax-free grocery shopping at decent prices. I could go on. You cannot convince me that that vast majority of Soldiers who find themselves in financial troubles have gotten a raw deal from the Army. If anything, they often get so much assistance that they never learn their lesson.

    -- sometimes delaying transfers and promotions
    As it should! It's an interest-free loan! If AER is so unfair, then carry your ass down to the payday loan office and see how fair life is.

    ... and too often violates its own rules by rewarding donors, such as giving free passes from physical training, the AP found.
    That sounds more like a lousy chain of command than AER. Someone please explain to me how AER ever could have told me that one of my Soldiers did not need to attend MY physical training session because he gave money to AER. I've never seen it happen, and if anyone ever attempted to make it happen with one of my Soldiers, then they would have been advised to perform a carnal act that defies physiology.

  5. #5
    Council Member Ken White's Avatar
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    Default I sort of tiptoed around all that because

    I've been retired a long time and things change -- but, based on the Schmedlap response, it is apparent that in the case of AER, not much has changed.

    I'll add one point from the article. This is the first paragraph:
    "As soldiers stream home from Iraq and Afghanistan, the biggest charity inside the U.S. military has been stockpiling tens of millions of dollars meant to help put returning fighters back on their feet, an Associated Press investigation shows."
    That is not only an incorrect statement, it's stupid -- and it's designed to inflame. That 'stockpiling' has been going on since 1942. AER is not "meant to help put returning fighters back on their feet" -- it is designed to help Soldiers and their families in adverse circumstances. Grants and loans are just part of what they do.

    That particularly egregious initial paragraph sets the tone for the rest of the article. Sad. The play on the 'returning warrior' shtick is particularly disgraceful IMO. The bulk of the Army is routinely not deployed and the folks here in the states are the ones who need AER help. One returning with all the tax free bennies from a deployment should not have a problem -- if he or she does, it's highly probabler it's self inflicted

    This is one paragraph of saving grace and relative honesty:
    "Make no mistake: AER, a normally uncontroversial fixture of Army life, has helped millions of soldiers and families cope with emergencies, as well as college costs. Last year alone, AER handed out about $5.5 million in emergency grants, $65 million in loans, and $12 million in scholarships."
    All the benefits for contributing or 'punishments' for not doing so are chain of command issues and while I can't speak for today, I can say that in 42 years in and with the Army, I never saw such foolishness. What I did see was a quite a few guys try to take advantage of the system by getting a loan under flaky circumstances and a few more who tried to renege on paying their loan back -- the same guys who were also behind on other payments who were trying to live beyond their means.

    That's a sorry article and it's an example of why I said I do not trust anything from AP nowadays. They have truly lost the bubble.

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    Default

    I was very skeptical seeing the title, as beyond generally having formed a good opinion on AER while on active duty, last Christmas we did some charity research for our big annual charity donation, and AER scored very highly as a charity, based on what percentage of charitable donations reach the intended beneficiary audiance (as opposed to being absorbed by the charity's infrastructure as salaries, and so forth). I mean, very high near the top of the chart. A lot these new charities set up to help soldiers once the war began did very poorly (IIRC, there was a thread on it here, particularly lambasting GEN (ret) Tommy Franks' endorsement of some of these dubious charities). I was surprised to see AER accused of malfeasance, glad to see it's pretty much bunk.
    He cloaked himself in a veil of impenetrable terminology.

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    Default How to make headlines of a non-story

    I'm with Ken (as usual).

    The alleged malfeasance is not lining the pockets of administrators, or losing millions of dollars, but simply hedging bets by financing a substantial reserve. The money's still there; it's still available. The story is simply an attempt to sell newspapers through sensationalism.

  8. #8
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    Quote Originally Posted by patmc View Post
    Is CFC still OK?
    Yes and no. CFC is not a charity. It is a clearing house for charities, to minimize the soliciting federal employees are on the receiving end of. One stop shopping.

    By all means, do NOT give unspecified donations to CFC. Your unspecified donation gets pro-rated out over the list of charities, and many of them are charities you do not want to be supporting. Scan the list some time.

    If you specify your charity, they get your donation less an admin fee for running CFC. I don't recall what the latest admin fee is. In short, your charity winds up with a little less than what they would get if you gave to them directly. So that can be a negative if you would actually go the Plan B - direct-to-charity route. But since many won't do that, there's a market for CFC that makes sense and at least conceptually justifies the fee -- convenience for the donor, efficiency of scale for the charity.

    Edited to add: CFC FAQ indicates their campaign costs are 10%.
    Last edited by SWCAdmin; 02-23-2009 at 10:14 PM. Reason: more info

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    Council Member J Wolfsberger's Avatar
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    Default BBB findings

    The Better Business Bureau rates charities and non-profits according to a set of standards found here: Charity Accountability Standards

    Their report on AER can be found here: Better Business Bureau Report for Army Emergency Relief

    According to them, AER does not meet their Standard 10 : "Ending Net Assets - Avoid accumulating funds that could be used for current program activities."

    Specifically:

    "AER does not meet this Standard because according to its audited financial statements for the year ended December 31, 2007, the organization's total unrestricted net assets were $334,171,549, or 13 times the charity's total expenses of $25,837,828."

    In addition. it fails Standard 12 : "Detailed Functional Breakdown of Expenses - Include in the financial statements a breakdown of expenses (e.g., salaries, travel, postage, etc.) that shows what portion of these expenses was allocated to program, fund raising, and administrative activities. If the charity has more than one major program category, the schedule should provide a breakdown for each category."

    Specifically:

    "AER does not meet this Standard because its financial statements did not include a detailed functional breakdown of expenses by natural classification (e.g., salaries, travel, postage, etc.) that shows what portion of these expenses was allocated to program, fund raising, and administrative activities."

    However:

    Uses of Funds as a % of Total Expenses

    Programs: 84% Fund Raising: Less than 1% Administrative: 16%

    Which is actually looks pretty good. I don't understand why it's not distributing funds.
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  10. #10
    Council Member Ken White's Avatar
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    Default Probably because

    a. It has more sense and better operating standards than Citibank???

    b. Unless there's been a change, soldiers are required to first approach the American Red Cross if financial help is required. If the ARC declines and if the the solider demonstrates potential hardship for which he essentially is not totally responsible as opposed to merely needing or wanting some money, the AER will then generally lend him the minimum amount to get by. They do not do debt service or counseling, the Army itself does that. Been my observation that about a third of troops get money from the ARC, another third get if from AER and the remaining third could not satisfy either the chain of command, the ARC or AER there was a need and they were not at fault.

    NOTE: For the probably larger number of troops who could not convince the chain of command, ARC or AER, there is a long standing remedy. Drive down the roads leading to any US Armed Forces Post, Camp, Station or Bases. Note the number of Payday Loan shops, Title Loan shops, Pawn Shops, Household Finance Corporation, GAC and similar operations prepared to lend money at usurious rates. Note also that the relative number of such operations has declined over the last 20 years or so due to the fact that Citibank (and others) would give a PFC a $10K or even more credit limit on his credit card (also with usurious rates) even if he already had a car he couldn't afford. That's why Your and my Tax dollars are going to Citibank.

    OTOH, AER exercised sensible discretion in lending and AER has some money...

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    Quote Originally Posted by J Wolfsberger View Post
    Which is actually looks pretty good. I don't understand why it's not distributing funds.
    My understanding is that they distribute funds as they are requested by qualified applicants. If they're not distributing, that seems to imply that there is less need - which would make a lot of sense, given that deployments tend to be great opportunities for Soldiers to save cash, pay off debt, and stay out of trouble. I say, good idea to keep stockpiling. At some point, given this economy, spouses are going to be getting laid off from work and education won't get any cheaper. There may be a surge of legitimate need down the road.

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    Council Member jkm_101_fso's Avatar
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    Quote Originally Posted by Schmedlap View Post
    My understanding is that they distribute funds as they are requested by qualified applicants. If they're not distributing, that seems to imply that there is less need - which would make a lot of sense, given that deployments tend to be great opportunities for Soldiers to save cash, pay off debt, and stay out of trouble. I say, good idea to keep stockpiling. At some point, given this economy, spouses are going to be getting laid off from work and education won't get any cheaper. There may be a surge of legitimate need down the road.
    I just made the assumption that Soldiers weren't asking for loans as frequently. Or the approval process was tougher. Probably not the latter.

    It looks like CDRs/1SGs are doing a good job getting folks to donate still.
    Sir, what the hell are we doing?

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    Council Member J Wolfsberger's Avatar
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    Quote Originally Posted by Schmedlap View Post
    My understanding is that they distribute funds as they are requested by qualified applicants. If they're not distributing, that seems to imply that there is less need - which would make a lot of sense, given that deployments tend to be great opportunities for Soldiers to save cash, pay off debt, and stay out of trouble. I say, good idea to keep stockpiling. At some point, given this economy, spouses are going to be getting laid off from work and education won't get any cheaper. There may be a surge of legitimate need down the road.
    Agreed. That's why I posted the info from BBB without drawing any conclusions. 84% to programs is pretty good.
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    Default Current commander chime in

    Quote Originally Posted by Ken White View Post
    b. Unless there's been a change, soldiers are required to first approach the American Red Cross if financial help is required. If the ARC declines and if the the solider demonstrates potential hardship for which he essentially is not totally responsible as opposed to merely needing or wanting some money, the AER will then generally lend him the minimum amount to get by.
    Today, the Red Cross has a fund set up for each major command (Division level or equivalent) that they can produce fund sites and grants from. This is usually only used for OCONUS situations either at a forward deployed location or if the emergency is on foreign soil. It's essentially a "free plane ticket" program for Soldiers who receive Red Cross messages. I've also seen it used for your more "civilian" Red Cross situations a house burns down, flooding, etc. but obviously only required when there isn't insurance paying out immediatly.

    Been my observation that about a third of troops get money from the ARC, another third get if from AER and the remaining third could not satisfy either the chain of command, the ARC or AER there was a need and they were not at fault.

    Note also that the relative number of such operations has declined over the last 20 years or so due to the fact that Citibank (and others) would give a PFC a $10K or even more credit limit on his credit card (also with usurious rates) even if he already had a car he couldn't afford.
    The primary reason why there aren't more AER grants, like Ken suggested, its because of credit cards. Your typical AER Grant scenarios where you need an expensive car part, the baby needs formula, a dingo stole your refrigerator, etc are easily mitigated by Mastercard. The Soldiers who come to AER come there either because they have exhausted all other means of payment or its a situation where credit isn't accepted.

    Another big reason why there aren't many AER Grants is because that "at fault" is such a difficult term to dissect. The overwhelming majority of AER assistance requests I see are because of past-due bills. So why are the bills past due? Mostly because of poor money management skills or Soldiers getting into financial obligations they can't support long term. Most of our Soldiers are one big power bill away from insolvency. It's sad, but it's true. In these cases, AER will not give a grant; only a loan and only to cover the amount required.

    As the article highlights, this causes the percentage of loans to grants to appear out of balance. However, its a direct response to the needs of the people they serve as outlined by the rules they set for how they distribute their own money.

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    Council Member ODB's Avatar
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    Default Recent experience

    Brand new Pvt (support guy) arrives to the unit. The night prior while at replacement he recieved a Red Cross Message. (I won't get into the lack of leadership at replacement, save that for another time.) By the time the soldier gets to us it is approx 1500. Immediately I'm briefed about the Red Cross Message. The soldier cannot afford a plane ticket home (poor country boy sending all his money to Mom and Dad). I send him to AER with an NCO. They return with a laundry list of required documentation and by the way AER closes at 1630. I wait till 1645, then call the Red Cross. After 30 minutes on the phone the Red Cross secured him a round trip ticket for 6 am the next morning. Red Cross can approve the use of AER funds, the soldier ultimately will pay the money for the ticket back to AER. Bottomline, in cases of securing travel for emergencies, bypass AER go straight to the Red Cross and it will happen fast. Just some info to put in your kit bag.
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    Council Member sandbag's Avatar
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    Great suggestion. I've gone this route a couple of times, myself. I've always found it remarkable that Red Cross volunteers will put out more energy and effort than paid AER reps.

    Quote Originally Posted by ODB View Post
    Bottomline, in cases of securing travel for emergencies, bypass AER go straight to the Red Cross and it will happen fast. Just some info to put in your kit bag.

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    Quote Originally Posted by ODB View Post
    I send him to AER with an NCO. They return with a laundry list of required documentation and by the way AER closes at 1630. I wait till 1645, then call the Red Cross. After 30 minutes on the phone the Red Cross secured him a round trip ticket for 6 am the next morning. Red Cross can approve the use of AER funds, the soldier ultimately will pay the money for the ticket back to AER. Bottomline, in cases of securing travel for emergencies, bypass AER go straight to the Red Cross and it will happen fast. Just some info to put in your kit bag.
    Its funny, I've had the exact opposite experience with the Red Cross.

    Its probably a local thing, but they're not open on weekends at all, require more documentation that AER and will only give out money if it relates directly to the service member (ie if your spouse's father dies, tough titty persian kitty). Plus they refuse to work with you unless you've gone through the whole Red Cross message nutroll which is just asinine in today's world of cell phones and email. While I was OCONUS, there were a few cases where Red Cross bureaucracy prevented someone from saying good-by to a loved one while they were alive.

    On the other hand, so long as its less than $1000 and a loan, AER only requires one document filled out by the Commander. No red cross message, no budget (aside from what's on the worksheet), no fund site number, no list of at least six flights, nada. Plus I've never had issues with spouses getting loans while their servicemember was deployed.

    Like I said, probably local and varies from post to post. The best policy is probably to figure out what works best where you're at.

  18. #18
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    Default Also IRT CFC

    To piggyback on Bill's CFC comment above, you should also note the bracketed numbers alongside charity's names in the CFC info booklet. This tells you what % of your donation is used towards the charity's own overhead costs.
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