Auto Donation Program is Junk
We are back to discuss the latest news within the world of auto junk and old car scrap and recycling. Cleveland Scrap Cars is an outfit who junks cars, thus allowing sellers to get cash for a car throughout Cuyahoga, Lake and Geauga Counties. One aspect of the auto junk industry is those who handle old car scrap by marketing the process as a means to obtain a tax deduction as a donation to charity. In these instances, you receive a receipt indicating that you chose to donate the car, rather than get cash for a car. As a provider who junks cars, we concur that this may be a viable option for junk car sellers based on their circumstances.
A recent article by Chris Morran on consumerist.com titled ‘Report: “Wheels for Wishes” Charity Misled Donors about Make-A-Wish Donations’ brought forth the following: “Car Donation Foundation, more popularly known as ‘Wheels for Wishes’ is the nation’s largest auto donation charity. It takes in millions of dollars from donated cars benefiting local chapters of the Make-A-Wish Foundation. Attorney General (AG) Lori Swanson says the charity has been misleading donors about how much money that organization was getting from the donated vehicles. According to a Swanson’s compliance report, MN-based CDF received more than 144,000 donated vehicles and brought in $108 million in revenue between 2011 and 2014. Only about 20% of that money ever made its way to the Make-A-Wish Foundation (MAW) chapters. During that same amount of time, more than 30% of CDF’s revenue was spent on advertising.
The two men who founded and run CDF, William Bigley & Randy Heiligman are the two owners of the company called National Fundraising Management (NFM), whose only client is CDF. These two gentlemen own 100% of another for-profit company called Metro Metals Corp., in the car auction and scrap metal business. Together, these 2 businesses received nearly $36 million from CDF between 2011 and 2014 — a third of the charity’s gross revenue. The AG’s office says these operations appear to be highly profitable for Mr. Bigley & Mr. Heiligman.
In 2013, the IRS criticized Bigley & Heiligman for being on CDF’s board of directors and owning two for-profit companies that directly profited from the charity. At the time, the IRS noted that a charitable organization should not serve as a generator to get business for the for-profit companies. After the IRS raised questions about the legitimacy of CDF’s non-profit status, Bigley and Heiligman, stepped down from the board. But the compliance report contends that the board thereafter delegated day-to-day management for running CDF to Mr. Bigley & Mr. Heiligman.
Though CDF’s contract with Make-A-Wish (MAW) allows the foundation to audit CDF’s books, MAW never took that opportunity until after learning about the Minnesota AG’s investigation. When MAW did audit CDF in 2015, it discovered a number of red flags. For example, there were no invoices found for the $1 million/month in advertising fees paid by CDF to NFM. For 2014 and into the 1st quarter of 2015, CDF paid a total of $29 million to NFM without proper invoices being used. The foundation auditor explained that an outsider looking at this operation might get the idea that the for-profit company is receiving something more of the proceeds instead of a legitimate management fee.
That same law also prohibits charities in MN from any deceptive practice in connection with any charitable solicitation, ‘including any such actions or omissions designed to confuse or mislead a person to believe that such organization is another organization having the same or like purposes’. The AG’s office says that CDF’s use of the MAW brand is confusing and misleading, especially since MAW only receives a small portion of the donation. The report notes that a search for “car donation” not only brings up Wheels for Wishes, but directly references MAW in the search results. Swanson’s office says it has received complaints from MN residents who believed they were donating directly to MAW only to find out otherwise. Additionally, the report claims that donors receive inconsistent & inaccurate information about how much of their donation would benefit MAW.
CDF is accused of telling donors that they can deduct at least $500 from their taxes for their donated cars. But that’s only true if (A) the donor itemizes their tax return, which fewer than 1/3 of taxpayers do every year, and (B) the car is worth more than $500. This is not CDF’s first go-around with a state regulator. In 2014, the South Carolina secretary of state and Oregon AG denounced the charity.” The full article is available at this link.
It seems that the auto junk and ‘get cash for a car’ business will always be intertwined with those that handle old car scrap lead by the idea of vehicle donation. CSC is a provider who junks cars in the greater Cleveland area. Our scrap car buyer is on-hand 6 days a week to provide you a quote for your junk vehicle or non-running car. Same-day removal of your car is possible at Cleveland Scrap Cars for those that call before 2PM during the week or 1PM on Saturday.