‘Infuriating’: Parents feel cheated by Kansas City student travel provider People to People
Since its creation six decades ago, People to People International boasts that its learning abroad trips allowed U.S. students to visit all seven continents, witness the fall of the Berlin Wall and meet former Soviet leader Mikhail Gorbachev.
Founded by President Dwight D. Eisenhower in 1956, initially as an arm of the federal government, the organization was envisioned as being a catalyst for world peace by connecting people from different cultural backgrounds. It has organized trips and hosts for thousands from all over the world.
But since 2019, U.S. students who signed up to visit faraway places — Australia, England, Japan and other countries — have been wondering when they would be able to spend their summer abroad. Travel was canceled during the height of the COVID-19 pandemic, and again the following summer. But accounts were held over, more promises were made and new trips were again planned for this year.
Then this week the nonprofit abruptly filed bankruptcy on behalf of the company that manages its travel. And now, many are out thousands of dollars — money they’re not sure they’ll get back.
Court papers show People to People International owes nearly $1.5 million to nearly 300 creditors in a bankruptcy filing made in the Western District of Missouri on Wednesday. The figures show ECE International, a for-profit corporation owned by the nonprofit, has little money to repay the debts.
People to People International is run by Mary Jean Eisenhower, the late president’s granddaughter. Attempts to reach her Thursday were unsuccessful, and there was no answer at the organization’s listed headquarters in Crown Center Plaza.
The nonprofit has yet to publicly acknowledge the bankruptcy. A generic letter sent to families enrolled in the program this week referenced challenges brought on during COVID-19 and apprehension about sending travelers to “a potential conflict area,” likely a reference to Russia’s invasion of Ukraine.
“Our efforts to continue on through these challenges has been trying on the staff and little of the challenges have been alleviated in the last two years. In recent weeks we have exhausted every available option to continue travel and company operations, with no success,” the message reads, along with directions for contacting the Missouri Attorney General’s Office about obtaining a refund.
“We have cherished being a part of your lives and wish you all a wonderful journey and a world of opportunities.”
Meanwhile, several parents from across the country spoke to The Star this week to share their experiences. Many feel like they were led astray, saying they’ve been kept in the dark about People to People’s financial troubles while continuing to buy in. And they want to know where their money went.
Among them is Brianna Burrows, of Queen Creek, Arizona, whose teenage daughter was supposed to be on this summer’s roster for the Celtic Cultures trip across the U.K. Burrows said they bought the trip as a gift and paid in full — $7,715 — and thought everything was moving along fine until a few weeks ago.
“Now we’re left holding the bag,” Burrows said.
Financial struggles
Over the past nine years, People to People International has demonstrated severe financial issues. Its books have been drenched in red ink every tax year since it last turned a profit in 2012, tax records with the Internal Revenue Service show.
For example, in 2019, the most recent tax year available, People to People International filed a return with the IRS showing a total of nearly $1.5 million in expenses and $830,917 in revenue, for a total loss of $655,490.
Of the organization’s spending that year, roughly $570,000 — or 38% — went toward salaries, and employee benefits and expenses. That included $125,000 for Merill Atwater, President Eisenhower’s great-grandson, who worked an estimated 35 hours per week during a stint as chief executive officer.
Earlier years did not fare better. Between 2015 and 2020, tax records show the organization’s net assets fell from nearly $3 million to $346,973. Revenues brought in from its service programs, its chief income generator, continuously fell during that time.
Financial hardships led the company to apply for two loans through the Small Business Administration’s Paycheck Protection Program, a federal disaster relief initiative that came in the wake of economic downturns caused by COVID-19.
Both loans, amounting to $226,500, were approved by the SBA between April 2020 and January 2021, according to ProPublica, an investigative news organization that runs a searchable database of PPP loan recipients.
In the nonprofit’s bankruptcy filing, the listed debtor is ECE International, LLC, a Florida-based corporation that has handled its travel programs for roughly the past six years. The company is majority-owned by People to People International; its co-owner is a parent corporation called ECE International Group, LTD, based in London, England.
The nonprofit organization and ECE — short for Enriching Cultural Experiences — partnered up in September 2015. The partnership marked a switch from another company based in Spokane, Washington that went out of business.
Most of the money ECE now owes is to individuals who were enrolled in the travel program. Amounts owed to each person range from $10,530 to $175, though most outstanding debts are in the thousands of dollars.
But the bankruptcy filing shows the company’s bank accounts only total $53,737.04. Another $229,000 is listed in accounts receivable that may be collected.
Chris Nuelle, a spokesman for Missouri Attorney General Eric Schmitt, said Thursday that the office has been working to assist the families that have claims. He said the office is currently acting as a mediator, and confirmed many complaints have been received.
Nuelle also encouraged anyone who believes they are owed money by People to People to reach out to the attorney general’s office for assistance.
‘It’s infuriating’
In 2019, Jennifer Conklin, of Lancaster, Ohio, started planning to send her teenage daughter for a trip to Europe chaperoned by her music teacher. The Conklins enrolled in a program and $643 was taken from her checking account monthly to save up for the summer trip.
“We do have this fabulous travel company who understands happenings and is willing to sort of wait a couple of weeks to try to accommodate as many people as they can. But for a lot of us it’s really up in the air,” said Conklin, who is owed $7,440.
For the past 20 years, Davis Hotard, a longtime teacher from Baton Rouge, Louisiana, has helped organize student trips through People to People. And the organization routinely offered unique experiences, Hotard said, that made its program among the best in the world.
In London, students met with a former member of Parliament. In Rome, they heard from a member of the Swiss Guard who described his job protecting the pope. They saw the Blue Mountains in Australia and rappelled down the side of a castle tower in Wales.
“They’ve all been absolutely fantastic trips. I mean, the educational experiences students have gotten — absolutely life-changing,” said Hotard. “So, it’s really heartbreaking to me and all the other leaders that I know who have dedicated years of their lives to this program.”
This summer his student group of 15 was destined for Japan. It was an 18-day trip with a price tag of nearly $8,000 per person.
Hotard said the kids figured something was up when they stopped being able to access the company website in mid-March. No phone calls or text messages were being returned over the course of roughly a month. Finally, on Wednesday they learned that the company had declared bankruptcy — and they fear the thousands of dollars spent on the program will never be returned.
“The way it was handled was just ridiculous,” said Hotard.
“It’s infuriating. It really is.”
This story was originally published March 25, 2022 at 8:01 AM.
