Facing an Uncertain Future

BY JACK McMANUS

The Coronavirus Disease 2019 (COVID-19) pandemic is an unprecedented emergency that has brought profound daily change to every aspect of our lives, encroaching into known and as yet unknown areas of business and personal activities. In view of the constraints imposed by the pandemic, including the closure of all non-essential businesses, VVA faces severe declines in our revenue streams and funding sources.

We are in the process of developing and executing a dramatic organizational drawback to keep us in viable condition for as long as possible.

VVA is fortunate in that we have significant financial reserves that can help cover contingencies in the event of a catastrophic event such as the current pandemic. We built a reserve over the last 25 years, a strategy that proved to be wise as we now have some assets to keep VVA above water for a while longer.

We are also fortunate in receiving a $700,000 stimulus loan (which will likely turn into a grant) that helps give us a bridge by covering payroll, benefits, and some operating expenses over the next eight weeks.

Between our careful financial management in the past and the stimulus loan, we have assets that will allow us to weather the COVID storm over the short term. But doing so will still require that we completely alter the way we operate. VVA has been dependent on donations from the public and our donor contributions for funding our programs since the organization’s inception—and all of our fundraising programs are in either complete or modified shutdown at this time.

VVA gets the majority of its funding through donor contributions from our Household Goods Donation Program (HGDP), Car Donation Program, and Direct Mail Solicitation Program. Of these, the largest funding source is the HGDP, which provides approximately 60 percent of our operating budget. During the pandemic the HGDP buyers (the individual thrift stores) were designated non-essential businesses and ceased operations everywhere in the U.S. on March 23. As a result, our buyers significantly reduced or furloughed staff—several thousand employees across the country were sent home.

The HGDP buyers tell us we can expect the shutdown to last a minimum of 20 weeks before they restart retail operations at any level. While it is important to know that the HGDP has adequate resources from the previous year’s true-up of accounting to fund VVA operations at the current rate for four months, the stores will still need at least eight to ten weeks to see business resume at pre-pandemic levels after reopening.

Our next largest funding source is the Direct Mail Solicitation Program. It is unknown at this time how successful this program will continue to be. We are working with our vendors to monitor the results. The other major funding source is the Car Donation Program, also significantly affected by the COVID-19 emergency. Donations are down but operations continue. We are also closely monitoring this situation.

While VVA has enjoyed long-term loyalty and commitment from our funding partners for decades—and they all indicate they want to stick with us in some modified way in the future—the reality is that for our partners to return to the level of financial support they have provided VVA in the past will require not months after the pandemic is over, but years.

The VVA Finance Committee is developing an amended budget to present to the Board of Directors in July that will reflect these realities. The amended fiscal year budget will incorporate the new, reduced funding and expected program expenditures, and will carry us through this fiscal year and through FY 2022. This budget will reflect a greatly downsized organizational structure. We have frozen all expenses other than what is critical for day-to-day operations. All travel has been frozen. As far as possible all meetings will be virtual ones conducted online or by teleconference. The National Leadership & Education Conference in July has been canceled. The BOD meetings will be conducted through an online process using a recorded electronic vote system.

This is a work in progress that will entail major Board decisions over the next several months. Our financial reserves may be accessed, with BOD authorization and approval, to continue to operate in a downsized manner into the foreseeable future. The revised fiscal year budget to be presented to the Board will likely require difficult decisions to assure longer-term stability. We anticipate no changes in revenue distribution to chapters and state councils for the next four months. Further distribution beyond that period will be subject to the approved amended budget.

While the COVID crisis has a direct impact on VVA’s finances, other factors influence our financial position and, together, have major implications for the future.

An overriding factor is the conventional view taken by many Americans these days that veterans are all taken care of. Too many think that veterans’ concerns have been fully addressed by the VA and need no further attention. In light of this prevailing national opinion, attracting fundraising and support for veterans has never been more difficult.

Another critical factor is waning VVA membership. With membership limited to Vietnam Era veterans, we are aging out. Despite the fact that VVA has more members now than ever, it is ever harder to draw member participation and to fill positions at the chapter level. Throughout its first three decades, VVA never exceeded 50,000 members. Although we’re currently at 87,000 members, there is far less member participation now than 30 years ago. Many of us simply no longer have the physical ability to participate at the levels we once did. In the future we will be more reluctant to go to public meetings, use mass transportation, and make our way through airports. And even when the need for social distancing is truly over, none of us in VVA will be getting any younger.

Some have suggested opening membership to all veterans on the presumption that we will attract younger vets. But this is unlikely. The country has changed. Membership in traditional VSOs such as the VFW and American Legion has been declining for years. VFW posts are closing in ever-greater numbers. VVA took a different organizational approach as a new VSO in the 1970s, but our great strength was, like earlier VSOs, in active local participation. And that kind of participation is essentially gone. Old school VSOs are fast becoming irrelevant in their communities compared to the position and status they held in years past.

Newer veterans organizations run with greater financial efficiency. They have operated online from the start, making the shock of the COVID emergency less injurious. Rather than partnering with VVA, new organizations compete with us for funding sources. We should not assume that by simply opening our membership to all, younger vets will be interested in joining us. The odds are they will not.

So as we navigate our immediate fiscal challenges, we watch public funding for veterans decline, the old VSO model deteriorate, and younger vets choose to forge their own ways to organize and support one another as opposed to joining forces with VVA or any other VSO.

The COVID pandemic will only accelerate these trends.

VVA will never again look the way it once did. We will never completely return to the way we were before the pandemic. We will have to change the way we’re structured. We will have to change the way we’re governed. We will have to change the nature of our relationships with our chapters and state councils.

Much remains speculative about the pandemic. We cannot know what will happen next. The assumptions we have today may not be true next week. But the bottom line remains: It will be a very long time—if ever—before VVA returns to the financial wherewithal the organization has seen in the past.

Even though life will be very different from now on, VVA is still here and working to follow through on our core objectives as a national organization. This is demonstrated very clearly in the Open Letter to Health Care Providers from Vietnam Veterans that VVA recently issued.

Realizing that the doctors, nurses, and other health care professionals working to care for COVID victims will face some of the same post-traumatic issues many of us have struggled with, the letter notes that while our circumstances are not the same, VVA sees a correlation in the “fallout from our wartime experiences.” The letter goes on to offer VVA, with its wealth of expertise about PTSD and knowledge of available services, as a ready partner to offer support and “a common ground” to help health care professionals emerge intact from this unprecedented event.

The letter ends with two words that I think apply here as well: Stay strong.