Make-A-Wish Minnesota Severs Ties With Car Donation Foundation
MINNEAPOLIS (AP) — Make-A-Wish Minnesota has cut ties with a vehicle-donation charity that's being investigated by the state's attorney general, the chairman of the organization's state board said Tuesday.
In an emailed response to a question from The Associated Press, Make-A-Wish Minnesota board chairman Mike Kust said: "I am confirming that we have ended our relationship with the Car Donation Foundation. We have no additional details at this time."
Car Donation Foundation was accused last week of putting a fraction of money toward its advertised mission while steering millions to for-profit companies owned by the group's founders. Attorney General Lori Swanson said her investigators found that during a four-year period, about one-fifth of Car Donation Foundation's $108 million in gross revenue went toward charitable grants.
The St. Paul-based foundation solicits vehicle donations under a "Wheels for Wishes" program that pledges the proceeds to local Make-A-Wish chapters to help children battling cancer. It uses Make-A-Wish logos on its website.
Swanson accused the Car Donation Foundation of lacking transparency.
"The Minnesota Attorney General's report is grossly misleading and shows a fundamental lack of understanding about how charitable car donation programs operate," Car Donation Foundation's board said in a statement Tuesday.
The board said it respects Make-A-Wish Minnesota's decision but found it unfortunate that the charity decided to cut ties without any discussion, and before giving Car Donation Foundation a chance to respond to Swanson's report. Car Donation Foundation said it has been one of Make-A-Wish Minnesota's largest donors for more than four years, providing over $1.3 million dollars to help grant 15 percent of all wishes granted.
Car Donation Foundation makes itself attractive to donors by arranging quick pickup of inoperable vehicles and documentation that could be used for income tax deductions. Swanson said last week that almost 50,000 vehicles were donated to the foundation in 2014, amounting to $37 million in revenue.
Swanson said the foundation would pay one of the founder's for-profit companies for managing the charity's operations and fundraising, and another associated company for towing, scrapping or re-selling donated vehicles. The two companies, owned by William Bigley and Randy Heiligman, reaped a combined $36 million from the foundation between 2011 and 2014, according to a review of tax records. She said $23 million went to its charitable mission over that time.
The foundation has a presence in about 40 states and has come under prior scrutiny by the IRS over its ties to the private firms. The founders left the charity's board of directors in response but maintained a hands-on role in daily operations.
According to internal documents released by Swanson, Make-A-Wish Minnesota's chief executive resigned in June amid an independent probe. The charity told Swanson's office he was paid $70,000 by the private companies to help line up deals between local chapters nationwide and the car-donation charity, receiving $5,000 for every contract arranged.
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