Car Donation Charity
Car Donation Scam
Congratulations! You’ve just decided to donate your car to a worthy charity. Or have you? You may have just fallen victim to a car donation scam. A person scamming other people out of money isn’t new. In fact, we are always being cautioned about telephone and door-to-door solicitations. But what about people pretending to be collecting used cars on behalf of a charity and instead are running a car donation scam!
Here are a few facts that you may not be aware of:
The
majority of car donation programs are run by for-profit used car dealers/fundraisers
and not by not-for-profit organizations.- In cases where you donate your car through a for-profit dealer or fundraiser, most of the proceeds from the donation go to that same dealer or fundraiser, sometimes leaving as little as 10% of the donation for the actual charity.
- The idea of getting a tax deduction for doing a good deed draws many people to the idea of car donations. But unless the car is donated directly to an official charity and the name of the charity is on the title, the donation may not be tax deductible.
There are a number of things to watch out for in order to avoid being the target of a car donation scam. Take a look at this example of someone who thought they were doing a good thing. A person donated their truck which was valued at $2400. After the fundraiser sold the truck at auction and took away administrative and advertising costs, the charity only received $31.50! This is a case that was reviewed by the US General Accounting Office (GAO); published by the IRS.
A study also revealed that approximately 80% of charities who contract with fundraisers to run their car donation program receive less than 60 cents for every dollar value of vehicle donations.
So if you want to donate your vehicle and refuse to fall prey to a car donation scam, take these following steps:
- Make sure the organization is qualified: It is important to check that the name of the charity is correct since there are a lot of charities with similar sounding names. It is a good idea to also know where the charity’s main office is located. We have listed several charities on our website that do accept vehicle donations.
- Ask to see public documents: Most charities make their financial statements available to the public. If that is the case, don’t be shy to ask for a copy. Look for how much of a donation they actually receive and how they go about spending the donations for the organization.
- Ask many, many questions: Ask the people doing the soliciting if they are part of the official charity or if they are a private fundraiser working on behalf of the charity. If they are a private fundraiser, then ask them what they intend to do with the vehicle; fix it and use it within the charity? Sell it? And if so, how much goes to the charity?
If you follow these steps, you’ll be able to detect a car donation scam from the real thing and make sure your donation is going to the right place.