What kind of Las Vegas-based national nonprofit won’t allow its return for the 2013 tax year to be examined, in violation of the Internal Revenue Service requirements?
What kind of nonprofit won’t disclose to the Las Vegas Review-Journal the name of its new board of directors?
What kind of nonprofit uses a mail drop and fails to put its physical location on its website?
What kind of nonprofit’s founder and president won’t answer questions, even to clear up possible misconceptions?
Let’s answer the last question first: Ann McGee, president of Miracle Flights for Kids, a Las Vegas-based national tax-exempt nonprofit, won’t answer my questions.
Repeated efforts since Feb. 12 to interview McGee have been unsuccessful. She refused to answer four emailed questions. Maybe if the IRS asks, she will be more forthcoming.
Finally, she sent an email asking her statement be printed.
“Miracle Flights for Kids stringently complies with all IRS 501©(3) regulations. And, in our 30 year history, we have never violated any of those regulations. Contrary to your personal belief, our focus remains on helping children throughout the country as evidenced by the over 93,000 free flights that we have completed for tragically ill children. Our Board of Directors’ and our thousands of nationwide supporters are proud of our accomplishments and we are looking forward to the next 30 years of helping children with serious cancers and other debilitating diseases. To learn what people experience with Miracle Flights for Kids, please go to http://greatnonprofits.org/reviews/miracle-flights-for-kids.”
Charity Watch once gave Miracle Flights an F rating, so not all believe it’s a great nonprofit.
The Miracle Flights website says its most recent tax forms are on the website.
It’s the 2012 form, not the most recent. The IRS website showed the most recent was filed in December 2014 and covers 2013. Why McGee refused to provide 2013’s form is incomprehensible. I can get it from the IRS, eventually.
The 990 forms say in bold print “Open to Public Inspection.”
I went to inspect about 11 a.m. Monday, but Miracle Flights operates behind locked doors, and people must be buzzed in. No one buzzed me in. No one answered my calls. Or returned them.
Then there’s the unanswered question: Who are the new board members?
McGee, 68, refused to identify the new board of directors. Click on the website’s link for board of directors, and you will see no names have been listed for months.
Efforts to find out why the previous board left were unsuccessful. Las Vegas businessman and former Henderson councilman Larry Scheffler had been on the board more than 25 years. The other longtime board members included former Las Vegas City Councilman Michael McDonald and his friend Rick Henry and Jeana Yeager. McDonald said a confidentially agreement prevented him from commenting. Scheffler and Henry failed to return repeated calls. Yeager couldn’t be reached.
It wasn’t clear if McGee ousted the board or the board left on its own for some reason. Board members are now personally liable for fines from the IRS if they overcompensate charity employees.
McGee started Miracle Flights for Kids in 1985, and there is no doubt her nonprofit — which provides flights for sick children so they can obtain health care — provides an excellent service. Low-income children who couldn’t afford to travel elsewhere for treatment are provided flights at no cost to them. The nonprofit either pays for the flights or persuades the airlines to donate them.
McGee earns $250,500 and has another $22,500 in retirement and deferred compensation from Miracle Flights, for a total package of $273,000. Her husband, William, is paid $66,473 to work 50 hours a week.
The Review-Journal first raised questions about the operation’s finances in 2007 when the newspaper reported that less than one-third of the donations went to help sick children with flights and that fundraisers kept far more for themselves than what went to the charity. The pattern continues today. Two companies were paid more than $1 million to raise $232,841, according to the 2012 tax forms.
Then there’s this oddity. How to find the physical location of Miracle Flights for Kids.
On tax records and on the website, McGee lists 2764 N. Green Valley Parkway, Suite 115, as the nonprofit’s address. That’s a UPS mail drop. The IRS is OK with that.
The actual office is in one of two buildings purchased by MFFK Holdings Inc. in June 2013. Without the most recent tax records, I couldn’t confirm that those buildings and land are disclosed as owned by the nonprofit. In secretary of state records, McGee is listed as president, secretary and treasurer while Yeager is director.
The buildings at 5820 S. Eastern Ave. and 5740 S. Eastern Ave. also house commercial operations. Carrington College. AARP. PERS. While the Miracle Flights sign on both buildings is prominent, if you didn’t see the signs, this nonprofit is difficult to find, unless someone tells you where it is.
In September 2013, Miracle Flights reported on its blog that it will use an unexpected $40 million contribution to expand its operations internationally. Plus, it plans two other programs, one providing service animals for families, the other providing travel assistance for families attending medical camps and retreats.
The money came from a class action lawsuit filed against British Airways and Virgin Atlantic Airlines, which were sued in 2007 for fuel surcharges. The $40 million is the amount that went unclaimed, and the judge ordered it be donated to a worthy charity. Miracle Flights was chosen. The spokeswoman for the Seattle law firm that handled the case failed to return calls asking why Miracle Flights was selected.
McGee, 68, has a history of glowing press coverage and awards. CNN honored her as a CNN Hero finalist and gave her $10,000. Amazon includes Miracle Flights as a nonprofit customers can contribute to through certain purchases. The Engelstad Family Foundation has been a generous donor in prior years. So has Cox Communications.
In September, long after the $40 million donation, Project Dinner Table made Miracle Flights the beneficiary of its fundraising dinner. On March 12, Dick’s Last Resort is conducting a fundraiser for Miracle Flights and asked that people bring a cuddly toy and said 15 percent of the bar receipts will go to the nonprofit.
The nonprofit’s revenues in 2012 were $2.4 million, and they increased to $43 million. Suddenly they’re a big player.
Presumably, the nonprofit is receiving rent from the office buildings on Eastern Avenue. That should provide more income for the charity.
But one of the unanswered questions is this: Is MFFK Holdings part of the nonprofit? County records show the holding company bought the two parcels totaling nearly seven acres and the buildings for more than $10 million. That should show up as an asset on the most recent tax forms.
The 990 McGee won’t show me.
Nor would she answer an emailed question about MFFK Holdings and how it relates to Miracle Flights.
Also, I specifically asked her about line 17 on the tax return and Part 9 where year after year, large sums were named as “other” fees for services for nonemployees. Between 2009 and 2012, more than $2 million was described as “other” without any explanation on tax forms that allow plenty of chances to explain.
A retired IRS criminal investigator asked to review the 2012 tax return said that’s a lot of unidentified “other.”
The positive in all this is that in 2012, there were 5,965 flights provided for low-income sick children from all over the country to help them obtain medical care.
I will criticize how McGee operates with a total lack of transparency, but I can’t criticize her accomplishments.
Jane Ann Morrison’s column appears Thursdays. Email her at email@example.com or leave a message at 702-383-0275. Find her on Twitter @janeannmorrison