but, folks who fly Angel Flights do that routinely, so how does it work?

Angel Flight is specially recognized by the FAA. It operates almost as
an exempt 135 operation. The FAA has tried to kill it a couple of times
but politics won't let it happen. After 9/11 when only part 135 could
go VFR, Angel Flight was flying VFR too. A couple high profile
accidents and it would probably gone quickly though.

-Robert