Before you start reading my comments, here is a link to the entire article about AER written by the AP.
This is also a link to the AER Homepage.
I've worked with AER a number of times, and participated in the Army Blogger's Round Table today with the AER's Deputy Director of Finance, COL (Ret) Andrew Cohen. I have a number of issues with the article, and also some notes from COL Cohen to try to dispel the rumors stated in the AP article.
"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."
COL Cohen spoke directly to this point a number of times. The first part was that the $117 was not correct, and they were not sure where that number came from. The article claims it is from tax records but does not elaborate nor offer empirical evidence. On top of that, COL Cohen stated that the operational funds that were being "held" were to a tune of $190 to $200 million. The reason for maintaining that reserve was to ensure that AER would remain solvent. With the way the markets have been acting lately, I really can not blame them. For every dollar that AER has taken in, a total of $1.48 has been spent on no interest loans and grants for soldiers. With a negative delta of spending, having a reserve sounds like a good idea. In addition if AER started to dip directly into that reserve at current intake of funds and current output of funding they would at best estimates remain solvent for another 9-10 years. Again, with the way the markets have been acting, I don't see a problem here.
"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."
Well Ill address this in two parts. The first is from COL Cohen. He stated a number of times that AER does not condone behavior of this sort, and even has a third party watch dog organization in position to watch for this. From my own personal perspective, I have never seen this. Now, I wont lie, I have heard stories from the past that things like this happened. But, I have been on active duty for close to 12 years now, and have never seen any of these activities occurring.
"Neither the Army nor Sgt. Major of the Army Kenneth Preston, an AER board member, responded to repeated requests for comment on the military's relationship with AER."
Well I cant speak for the Sergeant Major of the Army but COL Cohen said today that a press release was sent back to the AP. They don't know if it is going to be published or not by them, but I will be watching very closely to see if the AP publishes it.
One of the other issues that is brought up was the accusation that AER was cutting back on their scholarships. in 2008 AER gave out 12 million in scholarships. This year because of market losses they are cutting that to 8 million. Now this is not reducing from current scholarships but rather cutting the amount of money to new scholarships. I know Ive been watching my investments lately, and I know how much I have lost, I'm not surprised a foundation has lost money also.
In closing, Ive seen AER do a lot of good things for soldiers over the years. I will guesstimate I have had to bring a soldier to AER about 50 times. In that 50 times we had an issue once, that through command involvement, and after action reviews was fixed and didn't happen again. If you're going to do an expose of fund raising entities, I could come up with a very long list of others around that nation that should be done before AER. Why the AP went after AER I'm not sure, in truth, I'm pretty baffled.
God Bless America
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