Buddy Poppies are made by members of the DAV. The DAV is a non government organization made up of people who were disabled while serving in the US military.
I am a member. Although I am seldom active as a member, I assure you it has no government affiliation. The money raised goes to buy incidentals such as soap, snacks, under ware etc for disabled veteran's who do not have the resources themselves.
Another function of the DAV is in helping Disabled Veterans in legal battles against the US military for any mistreatment they experienced while on active duty.
You may wish to learn more about the DAV and see what we actually do.
http://www.dav.org/
In other words the money received from the sale of Buddy Poppies goes as charity towards individuals and not for the support of any military or government organization. True some of the people may not be deserving, but we can not judge who is deserving and who is not.