They’re everywhere – ads asking you to donate your old car or truck to a charitable organization. When you see this much advertising on any subject, you can be certain that it is generating revenue. Organizations don’t pay for advertising if it doesn’t bring in money. In 2008 alone the IRS reports that US taxpayers donated over 443 million dollars worth of old vehicles.
People who donate cars are looking for a tax break or looking to get rid of a junker. But people also donate cars to charity because they want their donation to do some good. Which begs the question: What percentage of the money earned from donating a car actually goes into programs that help people?
The answer to that question can be difficult to pin down – and the more difficult it is to pin down, the more wary you should be about the ‘charity’ you’re thinking of donating to. The first thing you need to check out – are you donating directly to the charity, or to one of the countless charity car donation middlemen out there?
You would think you’d be in the clear if the organization is classified as a 501(c)(3). But it’s not that easy. If the organization you want to donate your car to uses language like ‘Your donated car can benefit any charity, school or church that you choose’, or ‘choose from a list of charities’, or if they talk about donating the money from your car to a charity for kids, pets, veterans or anything else – you are dealing with a charity car donation middleman, not the organization that runs programs that help people. Some some of these middlemen are even more noncommittal about what they do with the money from your donation.
So what’s so bad about donating your car to a middleman car donation organization? The problem is you think you are donating your car to a charity, but you are really donating a large percentage of the money to the people who run the middleman organization. Before the middleman donates any funds from your donated car, they pocket money to pay for marketing, operating costs, and their salary. Some middleman car donation programs keep more than 70% of the money they earn.
The worst of them never disclose how much money they take for operating costs and their paychecks. Probably because they know people might not be so eager to donate cars if they understood that less than 30% of the money went into programs that help people. When you consider that any charity will subtract their own operating costs from any donation they get, the amount going to help people gets even smaller.
There are some easy steps you can make to be certain your car donation does the good you want it to. Most important: avoid middlemen. Donate your truck or car to the charity directly if possible. Second, do a little digging. There are a couple of effective online resources you can use to make certain the charity you’re thinking of donating a vehicle to is legitimate. Go to charitynavigator.org or the Better Business Bureau online at bbb.org and search for the organization’s name. If they have a questionable report, don’t give. If they don’t have any report at all, don’t give.
Most respectable charities will reveal the percentage of donations that go to programs that help people. You can usually find that information on their website or in their annual report. If that percentage is hard to find, or you can’t find it at all, that should raise a red flag and warn you that your donation could be going into someone’s pocket instead of charitable programs.
Done right, donating a car to charity is a win-win situation. You get a nice tax deduction and the charity gets the money they need to help people. It pays to take a little extra time to make certain you’re doing the most good with your car donation.
Donating a Car? CarsHelpingPeople.org is the online car donation site for Volunteers of America, Created in 1986 we are one of the nations oldest and most respected charities. Rest easy when donating cars, 100% of the funds stay with Volunteers of America, and 88% is used for services for veterans, the homeless, children at risk and seniors. CarsHelpingPeople.org.
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