Charities Respond to ABC News Report

Veterans charities rated "F" by the American Institute of Philanthropy, a charity watchdog organization, responded to ABC News'"Good Morning America."

All of the charities ABC News spoke with said they felt they were doing valuable work. While some of the groups rated "F" objected to AIP's findings, several of the charities said private fundraising companies were very expensive, but without them, they would not raise as much money for their cause.

The AIP ratings are based in large part on the percent of money raised actually spent on program services versus fundraising costs and overhead. Thirteen of the 27 received an "F."

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A spokesman for the Military Order of the Purple Heart Service Foundation defended his foundation's employment of a professional fundraising company. He said he believes donations are best utilized by providing needed assistance to veterans and not in developing at their own cost an internal volunteer fundraising program.

"We try to minimize fundraising costs and maximize returns," the spokesman said.

The NCOA National Defense Foundation took issue with AIP's methods of analysis. A spokesman denied that they spend more on fundraising than on their program services, and said that more than 70 percent of their revenue goes to programs.

A spokesman for the American Ex-Prisoners of War Service Foundation said his organization had no choice but to hire a fundraising company.

"It was better than nothing," he said. The spokesman said the foundation has recently stopped employing the private fundraising company so the percentage of funds going to fundraising will drastically change. When AIP's report comes out next year, "it will look very good," he said.

The Air Force Aid Society received an "F" based on the relatively low amount of money spent on program services compared to asset reserves. A spokesman said a large portion of its funding comes from investments; they do not receive large amounts of donations and suspect that is why they got the low grade. 

The Army Emergency Relief Fund was also rated an "F" based on its relatively large asset reserves. A spokesman said they should not be penalized for having a large amount of money saved.

"We meet the demand of soldiers that come to us," the spokesman said. He added that AER gave away $70 million in assistance last year and said that good investments have grown faster than soldiers need to draw from funds.

A spokesman for the National Veterans Services Fund said the professional fundraisers they employ make it possible for them to do their job.

"We would pay the same percentage for fundraising if we did it internally, and we would reach less people," he said.

A Paralyzed Veterans of America spokesman said his charity has been doing "'A+' work for all veterans, people with disabilities and their families 24/7." He disagreed with AIP's findings and said that nearly 73 percent of all donations directly benefit veterans.Lastly, the American Veterans Disabled for Life Memorial Fund said none of the funds have gone to the cause because they have not started building the proposed memorial to disabled veterans.  Construction of the memorial adjacent to the Mall in Washington, D.C., is expected to begin in 2008, the spokesman said.

This post has been updated.

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