Vehicle Donation Foundation Rejects Minnesota AG Report

Minnesota’s attorney general accused one of the nation’s largest vehicle-donation charities on Wednesday of putting little money toward its advertised mission while steering millions to the for-profit companies owned by the group’s founders. She said its advertisements are deceptive because they do not disclose that vehicles go to the foundation, not to Make-a-Wish.

When Rylie Pelton came across the “Wheels For Wishes” website, she thought it was a branch of the Make-A-Wish Foundation. Auto Donation Foundation, which has a presence in 40 states, is accused of passing along only 20 percent of what it raises to the charity it claims to support, the Make-A-Wish Foundation. The charity also used Metro Metals Corporation, another Minnesota company owned by the duo, as its scrap yard and auction house.

Nearly 50,000 vehicles were donated to the foundation in 2014, amounting to $37 million in revenue.

Until mid-2013, Bigley and Heiligman controlled the auto Donation Foundation as board members.

The auto Donation Foundation appeals for donations of used vehicles, which donors can deduct on itemized tax returns as charitable contributions. Based upon the reports received from the charities, the office will determine if any additional action is warranted under the laws regulating charitable institutions and their for-profit vendors. When the IRS raised concerns about overlapping control of the charity and the for-profit corporations, Bigley and Heiligman resigned from the board but continued to manage the charity as “co-executive directors”.

The vehicle Donation Foundation and National Fundraising Management both issued statements disagreeing with the compliance report but said they would not be doing media interviews. The foundation says it’s given more than $1.5 million to Minnesota charities since 2011 and more than $30 million to charities nationwide since 2011.

The “Charities Review Council” recommends that no more than 30 percent of a charity’s proceeds go to administrative costs.

Vice President Randy Heiligman’s compensation was $266,599; he worked an average of 10 hours per week.

Bigley and the Heiligmans’ compensation for running the nonprofit.

Swanson also forwarded her findings to the IRS, which could examine the foundation’s charitable tax status.

Make-A-Wish Minnesota released a statement Wednesday that said they were supportive of the investigation and would cooperate. It uses National Fundraising Management Inc. a for-profit company based in Hopkins, which is exclusively owned by Bigley and Heiligman, as its national fundraising company. In 2014, the auto Donation Foundation ended up on the “Scrooge List” published by the South Carolina secretary of state and the Oregon AG’s “Worst Charity” list, so we have to assume that they had a few awareness that there were problems afoot.