Just about everyone who is moved to donate to charity, whether in the form of a vehicle, other non-cash goods or plain ‘ol money, wants to be sure their gift goes to the best possible use. One way to make sure that happens it to actually become involved in your chosen charity. In most cases, that’s best done on the local level.

Such opportunities can also be a good social outlet for those who don’t otherwise get out much or are sick of meeting all the same old people. Volunteerism is one of the best ways for those without a lot of extra money or stuff lying about to donate to charity without breaking the bank. In essence, the thing you are best able to donate is that you have extra of.

Many people have more than plenty of extra stuff, whereas they don’t often think of themselves as having any “extra” money. It is on this premise that the Goodwill and Salvation Army (among many others) began taking donations of non-cash goods from the start – creating their now-famous thrift stores. Since the Goodwill organization came up with the idea of taking old cars in the 1960s, it has caught on.

It should be noted that many of the advertisements you see are actually put up by for-profit agents of otherwise legitimate charitable organizations. When you donate to a charity that employs such an organization, you may only donate a fraction of the car’s real value to your charity. It is in everyone’s best interest that you keep your business with charities as direct as possible, and that means localism, too.

This, of course, isn’t good for local causes. Therefore, perhaps the easiest way to make sure the vehicle or goods you donate to charity are actually used for that purpose is to find out, before you donate, just what sort of use they intend to put your old auto. Ideally, this would then be fixed up a bit and donated to a needy individual or family who are in grave need of transportation.

One thing that many ads imploring you to to take just about any vehicle you own (regardless of the shape) and donate to charity, is that there actually is a great need for transportation among the working poor. Often the least expensive rents, or places that don’t require first and last month’s rent saved up, are often found well outside the metro boundaries. Conversely, many of the manufacturing job and other entry-level work has moved out to where it’s cheap to build a “big box” store – namely, the outer ring suburbs or larger cities.

Of course, there are always people in rural communities that can use any good quality car that you can donate to charity Though fewer than half in the US live outside urban areas, that still means several million people are working (and often commuting to) rural America.

That means that the donation of real cars to people who need to drive them is paramount, no matter where you live. Though national services that operate large public campaigns, encouraging people to donate to charity. The problem is, unless your charity is truly local, you don’t know what’s going to happen to your car or the charity of your choice.

It is your right and duty to check and see where the car is going and to what use. If the organization you organize the pick up and/or sale with is a third-party agent (almost always operated for profit), you may need to keep looking for a charitable organization in your local community that is not focused on selling your vehicle as soon as it’s donated to charity.

Though this may require a bit of calling around, there is very likely a local organization that can arrange the gift of a running car to someone who needs it. Counties without large cities often conduct their own pickup and donation service. Your state Attorney General’s Office should have a list of charitable organizations registered in the state as well as a list of organizations that are authorized to conduct the necessary filings when your car is donated to charity

Don’t forget that the local high school and police departments may also benefit when you decide your car is ready to be donated to charity Call around or look online for IRS registered non-profit organizations (NPOs) if you’re not sure who is taking cars in your area.

Of course, this will cost you.  In total, before stamps or bus fare to go down and get them, getting a replacement title to donate a car in Minnesota will cost you about 20 minutes in figuring out the form and as much as $9.  This includes both the filing and title fee. 

In addition to this, you’ll have to wait awhile.  It can take as long as six weeks to get a replacement title in the mail, though you can put a rush on the process by paying a few extra dollars.  You’ll still need that title, though, before you can set about on getting that old car hauled away.

One of the advantages the duplicate title process is that you aren’t responsible for the bother and expense of getting current tabs.  Indeed, you don’t even need a licence plate.  It is, in fact, recommended that you take the licence plates off your car before you call the tow truck to come. 

When the charity themselves or their third party agents come to haul your car (running or not) away when you donate your car, in Minnesota, you don’t even have to be there.  You can just leave the doors open, everything emptied out except for the keys and signed title in the glove box.  Of course, in most circumstances you’ll simply be there with those items to give to the driver and sign the title away.

According to state law and federal regulation, when you donate a car in Minnesota, you should receive a receipt of transfer right there from the driver.  Very few charities or agents charge a fee for towing services.  Regardless of who picks up the car, ultimately, your charity of choice pays for the tow.  If you live a very long way out, it had better be a decent car, otherwise you’ll want to apply for a salvage transfer from the DMV.

Later, you’ll receive a receipt in the mail outlining the use your car will be put to.  It will also outline the amount your charity received in donated funds if the car was already sold.  Sales of such cars on the wholesale market typically get anywhere from 5-30% of their “fair market” value by the Blue Book.  Most donated cars in Minnesota are sold into the wholesale market for a loss that nets the charity in question, a rather small amount of money at the end of the day.

This is partly true because donated cars in Minneosta have traditionally been covered in rust and suitable only to be parted out.  Putting a “California” body on such a car may be done, but this is usually only the case when students are learning the art of body repair and replacement.  Fortunately for car owners in the state, finishes now are more resilient to salt damage and fewer cars, even in storage, have holes through them.

If used immediately, refurbished to be donated or sold, the value should be close to the “fair” Kelley Blue Book price when you donate a car in Minnesota to a charity that donates cars for use or for the instructional market. 

This value is the one used to calculate your 1040 Form deductions.  This amount will be subtracted from your net income when figuring the expenses for your income tax.  For those in middle class income tax brackets, this means that about a third of your deduction will come off your total tax bill.

If you do your homework and spend a little of time on the project, you can still find charities that accept car donations to be actually used as cars.  Often, such services only accept interesting or high valued donations that may have to be assessed by an independent appraiser to verify the value when taking deductions of over $5,000 when donating the car in Minnesota.

Of course, by the time many people even think to donate cars to charity, they’re often far beyond this point.  Indeed, since a great many charities (or their third-party, for-profit agents) will more than happily send someone to pick up vehicles that haven’t run under their own power since the Regan Administration, you can be assured that even the scrap metal has more value than you might think.

The first thing to do is to take a look at the Blue Book value, for private party sales.  This is the value you can expect to get when you put an ad in the paper and try to sell the car yourself.  Before you donate a car to charity, you need to know what other people are paying for it before you get any grand ideas of whittling your tax bill down to nothing.

There will be a section by where you answer a series of specific questions about the condition of the car.  You may be surprised just how a few small dings can really impact the resale value whether or not you choose to donate the car.  Charity organizations, of course, have the same access to these figures as yourself.  So, be honest.  If you come up with a condition that is less than “poor,” odds are you’ll have to settle for the paltry sum the auto will pick up at the wholesale auctions. 

According to a General Accounting Office investigation in 2003, automobiles that were sold this way netted between 5-10% of what the “fair” condition listing was.  Sometimes it’s hard to imagine such a paltry sum for something you’ve spent many hours of your life in.  Tell yourself, “she’s in pain – let her go.”

Unless you’re able to find a charity that will use your car as a car (rather than scrap metal and parts), you’ll have to accept that the charity you choose will get only 30-50% of that revenue after the price of towing is figured in.

If, on the other hand, you’re able to find a charity that has a training program to teach young people the mechanical arts, perhaps  there is a way to get a bit more for your car.  However, if you’ve got a terrible clunker, you probably ought to forget it.  There’s no point in fixing something up if it has no chance of being either valuable or cool.

It may take awhile, but after as many as nine months, you’ll get a slip of paper informing you of what your donated car at charity auction sold for and netted the school you donated it to.  Colleges are also able to receive auto donations that will be refurbished and resold, to your mutual benefit.

It is also useful to consider that you may receive a higher deduction value if your car is refurbished and donated to a needy individual or family in the area.  Some cities run programs like this and are even able to accept should you donate your car to the charity of you municipal government.

Organizations that teach people basic car maintenance and body work are probably not as interested in fast and swoopy-looking cars, but will take a serviceable vehicle that has very little wrong with it.  If you happen to know what the problem is, all the better, as it will give the charitable organization or NPO something to base a decision upon.

So, consider the value of your car when it’s been fixed up, both a little and a lot when you’re deciding what to do when you donate a car to charity  Though not a credit to take off your total tax bill, deductions reduce the income you’re to be taxed upon.  The actual amount of money you’ll save (or be refunded) is dependent upon your tax bracket. 

However, by taking some time and effort when you donate a car to charity, you can vastly increase the amount of money your car is worth as a deduction under the new IRS rulings affecting auto donation and deductible amounts.

Sometimes this means that a donated car can actually cost the charity money instead of earning it.  When the US General Accounting Office submitted a comprehensive report on donated cars and other vehicles in late 2003, it was found that as many as 5% of the donated cars were actually a liability for the charities concerned.

When asked why they would take such donated cars, most answered that they were more interested in cultivating a culture of donation rather than turning anyone away.  Of course, if they handled the donated car themselves, rather than letting a middle-man get a piece of the action, there would almost always be a slight profit, but that’s simply not how a majority of charitable organizations that are able to take in your donated car works.

Indeed, it is typically only the charities and non-profit organizations (NPOs) that have a mission of providing automobiles for charitable use who are actually running their own shops to handle donated cars.  Also, these outfits tend to be a bit pickier about the sort of donated cars they deal with, as a general rule.  Often they preferentially choose to work on donated cars that will have a high resale value when they’re running again or need minimal repairs to become useful to a needy family or individual.

Knowing all that, consider what your car is actually worth.  Is everything wrong with it at the same time?  Can you name a single part on it that’s really worth more than $100 (regardless of what you paid for it at the time.  Be honest with yourself and fairly assess before you donate.  A car that is unlikely to be sold for as much as the tow truck charge isn’t any kind of gift at all.

This is especially true if the vehicle in question isn’t running and is currently residing in a very rural location.  Think about how much it cost the last time you needed a tow truck and take that into your considerations of whether you should donate a car that has minimal scrap or parts value.

On the other hand, if the potentially donated car is quite old and collectible, even if it’s in terrible shape, some of the components might be very valuable if they’re impossible to find anymore.  Look around online and see what some of the parts you know are intact are worth on the open market.  You may be surprised how much even a hood ornament in good shape can go for, even if you can see daylight through the floor.

Another thing to take into consideration is how committed you are to donate.  Cars that may be problematic to sell as a whole are sometimes able to be parted out and sold for greater value.  If you’re handy with online auctions as well as mechanics, this might be a great way for you to make the money that you then donate as a cash gift to the charity of your choice.  Everyone takes cash, and you’re still able to write that off on your taxes assuming you’re prepared to file itemized deductions with your Form 1040.

There are always options, even in a donated car is more trouble than it’s worth for your favorite charity.  In the end, your own personal level of commitment to the well-being of the NPO in question is paramount.  If you don’t really care that much and just want it hauled away, there are services that will give you rewards such as tickets or vouchers for vacation packages for the privilege of picking up your vehicle for recycling.  Even this type of donated car, though not eligible for a tax deduction, is still one less car that will be crushed and sent to a landfill.

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As such, it’s imperative that you not only secure your receipt of transaction but find out exactly what has happened to your vehicle.  If it’s being used or fixed up for use, even if that includes a sale in the first two years after you’ve decided to donate.  Auto tax deductions are now very closely tied to the ultimate use of the vehicle, so those which are sold wholesale within the the first few months, without an intervening use (other than paperweight or small greenhouse), can only use that sale price as the deduction.

Furthermore, the amount that actually goes to the approved charity in question is the amount you must not exceed when preparing your itemized deduction at the end of the year.  It’s in your best interest to make sure that’s the figure you’ve gotten if there’s a third-party agent that is facilitating the transactions for the charity in question.  When you donate an auto, tax deduction concerns are such that if anything is wrong at all you risk loosing the whole deduction and attracting the attention of an auditor.

Thankfully, not only are there guidelines for what documents you should have, but also time-frames in which they must be sent to you.  For instance, when you actually turn over the title and donate the auto, tax deduction paperwork should be set in motion.  This means that if the intention of the agency is to turn around and sell as soon as you donate the auto, tax deduction paperwork should be forthcoming within 30 days of the impending sale.

Such sales usually take place within the first week or so after the vehicle is picked up.  So, if it’s been two months and you’ve not heard anything, be sure and call the charity or third-party agent to find out what has happened with your car.  Again, they are required to tell you their plans for your donated auto, a tax deduction range they expect (given that use) and when you should expect your paperwork in the mail.

If, on the other hand, you find out that your car is in good enough shape to warrant repair and use by a needy person or family served by the charity’s mission, there is not bill of sale to base your donated auto tax deduction calculation upon.  In this case, you should be given a notice within 30 days of this decision that indicates this practical use of the vehicle as well as the appraised value. 

If the car will be worth more than $5,000 this appraisal should come from an independent appraisal service (arranged by the charity or third-party agent) and be provided with a signed Form 8283, with a completed section B.

You should expect Form 8283 (section A) for any value between $500 and $4999.99 earned for your donated auto.  Tax deduction paperwork then is simply a matter of filing these documents with your Form 1040 Schedule A itemized deduction worksheet.

If at any time you fell you’re getting the run around from any of the players in this game, a call to your State’s Attorney General, Secretary of State Office or the Better Business Bureau are good places to start an investigation of a potentially fraudulent donation service.  If you’ve asked on more than one occasion for documents and they don’t arrive within the month, then you are officially getting jerked around with regard to your donated auto. 

Tax deductions are not a big deal now that there is an existing framework for getting the documentation you need.  Having a few pictures of the car as you’re getting ready to donate it are also handy.  It never hurts to keep a few in your folder just in case.

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1) You know someone in your church who really needs a car, and you’re in a position to donate an auto that requires only a small amount of work.

If you’ve been a member of a congregation for a long time, odds are you know a few people who’ve gotten down on their luck.  Instead of giving the car to them directly, if you arrange it through the church, then there will be no gift taxes to pay and you’ll be able to deduct the whole “fair value” amount.  This is usually best if the car is already in good working order.

2) The youth group needs a van for their upcoming fishing trip and you have one you’re sick of putting gas into now that the kids are off at college.

Just because you don’t have a use for a large vehicle anymore doesn’t mean someone else doesn’t.  Such donated autos are especially useful for team sports or camping trips.  Vans that are setup with benches and room for a whole pile of kids are perfect for this donation use.  Parochial schools are always on the lookout for these if they don’t already have one or the current model is on its last legs.

3) Your old car runs reasonably well and you’re sure someone in the church can use the car rather than it being sold for auction.

Since you presumably have the ear of someone in the church office, you can find out what the congregational need for cars is at any given time, ensuring that there’s a good fit for your donated auto out there.  Remember, you’re able to get far more deduction benefit if there’s a real need for your vehicle rather than a future sale, especially on the wholesale market.

4) One of the deacons is an auto repair expert and you want the kids to have a project for the summer to keep them out of trouble.

Of course, you’ll want to clear this with the deacon in question, but the goal of a donated auto sale is enough to keep several kids from running wild all summer while they’re learning a useful skill, and that’s invaluable.

5) You’ll feel very holy as a result.

The IRS can’t put a value on that.

6) You may donate as a type of self-imposed penance.

You can really put the icing on that cake by donating the money you save on your returns to the church or the charity of your choice in addition to the donated auto.

7) Your gift may inspire others to donate to a larger “Donated Auto Day” to buy a new organ or outfits for the choir.

Regardless of what the proceeds will buy, if you have a vested interest in the outcome of what the proceeds are to be spent upon, the idea of maximizing your deduction with donated autos isn’t nearly as important, especially if you’re using standardized deductions anyhow.

That woman down the street did it….

Hey, that’s not a very pure motivation!  Of course, it’s also a very popular one with donated autos or just about anything else.

9) Your yard is breeding old cars faster than you bore your nine children – it’s time to find all the extras new homes as donated autos, and you don’t care how.

The church will often have the use of a tow truck, and it’s good to just make junk go away at a certain point, regardless of the tax benefit.

10) Your church is the only charity you trust.

That’s up to you, but all qualifying religious and non-profit organizations are equal in the eyes of the IRS.

You may be beholden to render unto Caesar what is Causer’s, but there’s no need not to keep what is yours, donated autos and all, within your community of choice.

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This is true for several different reasons.  For starters, those who are self-employed are far more likely to take itemized deductions since such workers have far more upward mobility than a given employee, they also tend to make more a lot from such ventures.  Self employment also means that you pay your own contributions as well as those normally picked up by an employer.  This double taxation leaves many of the self-employed on a constant lookout for deduction possibilities.  When you donate a car to charity you can make up several thousand dollars at a time in deductions – sometimes enough to  bump you into a lower bracket.

Of course, not everyone who wants to donate a car is interested in the deduction.  There will always be people who just want their old junker cars to go away and many of the ads imploring you to donate a car rely upon the offer of free towing (and sometimes a hotel or cruise voucher) to help get low-value cars from far less off individuals than the PhDs who are donating perfectly good cars.

However, in yet another installment of how it pays to have a few extra coins to rub together, those who are able to afford to give a working car that is likely to be used for transport rather than sold at wholesale auction.  This other type of use occurs when you carefully choose a charity you trust, donate a car to it and find out 3 years later that it’s been used for various official functions and as transport for in-house needs that furthers the mission of the charity. 

As such, those who already have some extra money to throw around are more likely to get the higher deductible that they’re more likely to be able to capitalize upon in the first place.  That means the demographics of someone looking to donate a car have somewhat suddenly moved back to where they were before the advertising push of the 1990s.  Though many middle class people might donate a car that doesn’t run very well, they won’t enjoy the higher level of benefits that a better quality donation typically garners. 

But other than wealth, the other demographics of those who participate in charitable organizations when they donate a car include many of those who grew up or recently used the services of such an organization.  This is gives one a good idea as to how non-monetary benefits work in the real world.  The chance to give back to an organization that has helped one get back on their own two feet is an invaluable feeling of pride and accomplishment that the IRS cannot put a value upon.

So, despite recent setbacks in deduction amount for the typical donation from a mid-level income individual or family, this hasn’t stopped a segment of the population from donating scrap cars that they simply want hauled away as junk.  This is especially true in the case of vehicles that have no chance to have a useful resale value whether conducting the transaction yourself or letting a car donation service take care of it. 

The main difference between the classes of donation that have sprung up since the 2005 ruling means that if you choose to donate a car, it may not be very lucrative for the charity in question unless it’s running well and worth their while to fix up for use (rather than selling on the wholesale market), even if they don’t use a third-party donation agent.
 

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For starters, you should take into consideration the likely benefit you’d receive when you donate.  Even with a higher than average allowable deduction, you could end up not claiming it at all in the end.  Claiming charitable deductions has traditionally been thought of as something rich people do because it necessarily means you’ll have to file an itemized return.  This can actually mean a higher tax bill for some people. 

If you don’t have any other legitimate deductions and are filing as the head of household, it is entirely likely that a standardized deduction will actually be higher unless the car you’re donating is of rather high value.  Indeed, itemized deduction tends to benefit the self-employed most prominently since they are very likely to be rolling a sizeable percentage of their income back into the business anyhow (in part, to offset the double taxation that is the trade-off for not having a boss to answer to.)

Before you donate, you will also want to consider your motivations.  If there’s no other reason than a tax rebate to motivate you, perhaps donation isn’t for you.  The most successful automotive donations are enhanced by the satisfaction that good deeds have been done.  If you want to impress someone else, that’s fine, too.  However, given the restrictions and flaming hoops you’ll have to jump through when you donate, it’s a good idea to have at least one other compelling reason to donate, even if it’s to get the nagging voice of your spouse out of your ear concerning the car up on blocks in the back yard.

Consider also the condition of the car you plan to donate.  Is it running?  Would it require thousands of dollars in parts to be made reliable?  Does it get much of its value from style rather than substance?  Can you actually see a family of four going to the grocery store in it?  Do you have another more suitable vehicle to donate?  Honest answers are the only worthwhile type.

The practical uses of a car (rather than a sale price) are far more valuable to yourself, your deduction powers and the charity you choose to donate to.  As such, charities that use automobiles to help fulfill their mission, such as poverty achievement, schools and organizations that assist the elderly are very often looking for good quality, reliable transportation.  When you donate to such an organization, the odds of your car being used rather than sold is very high, providing it’s in good, trustworthy shape.

This means that if you can find an organization to keep from selling your car for two years after taking ownership when you donate, you can take the fair market value as a deduction.  This has been severely curbed since the early ‘aughts when the amounts actually given to charities and the amounts claimed as deduction on individual and business returns differed by more than 95% in some cases.

To combat this, if one donates a car that is then sold at wholesale, you can expect a receipt of sale for somewhere between 10 and 15% of the value you could get by conducing the private sale.  As such, many car donations that were once conducted for convenience sake have now become regular sales that result (or not) in cash donations.

It would also be wise to consider just how you’ll miss the car you inetend to donate.  In an effort to avoid regret later on, you may find yourself getting rid of the other car if you’re very attached to that old one.  Also, since older cars are more likely to appreciate when you sell after even just a year or two of ownership, depending upon the collectibles market.

Choose the right car and enjoy the maximum benefit when you donate.

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For starters, a business that runs (and presumably maintains a fleet) is in a position to donate time and labour to a vehicle donation program – not just used vehicles. Valuing such service on your tax returns is tricky at best and is best handled by a CPA. You should keep strict records of all interactions with the charity. Car donation can be part of a total charitable package that can help greatly with end of year tax evaluation, especially if the business is teetering on the edge of a higher tax bracket.

Also, the so-called “50% rule” that applies to private individuals, limiting their allowable deductions to less than 50% of their taxable income, differs for businesses. Generally, 30% is a reasonable self-imposed limit that will keep the auditors at bay.

How deductions are taken from your return also varies quite a bit by the the type of business you’re registered as and whether you file quarterly or annually. Again, talking to your accountant about the possibility of taking a donation rather than selling fleet vehicles on the open market is usually a stop-gap solution to a higher than usual tax burden as calculated for quarterly returns.

Of course, the flip side of this coin is when individual charity car donations are destined to become part of a institutional fleet, such as those employed by colleges and universities. These legal fleets are very likely to be maintained properly by trained mechanics, making it very likely that the individual donor will be able to take the “fair market value” deduction for a vehicle that is seeing fair market use rather than low-end resale for cash.

Other than the potentially high value of fleet cars that are donated and the extra concern of getting an independent appraisal for vehicles that will garner over $5,000 in legitimate deductions, the process is very much the same as private party charity car donations. Indeed, just like private parties, one is required to use the actual value of the vehicle to the charity in question.

Since fleet vechiles tend to be in good repair, they are very likely to be used as is rather than sold at auction. Charities know a good thing and a relatively late model vehicle in good working order to be received as a charity car donation is a rare thing.

As the owner of fleet vehicles ready for charity car donation, you can generally be assured that if you choose a non-profit, charitable organization with a mission to provide vehicular transportation to receive your donation, the odds are pretty good you’ll be able to claim a full “Private Party Values” from the Kelly Blue Book, depending upon the specific condition of your vehicles.

To make such a deduction claim from your legitimate charity car donations, be sure to take good pictures of the donated cars, just in case it ever comes to an audit. If you’re prepared, you have a good chance of fighting such intrusions off without problem as long as you have the correct documentation.

Be sure to save every single receipt you receive from a charity car donation organization, no matter who is running it. Often you’ll get one receipt from the actual transfer of title, and then in the next month or so, either a bill of sale or a record indicating what ultimate use your charity car donation was put to. Again, it’s always best to keep your business accountant fully versed as to what you plan to do with fleet automobiles, but donation may actually take a bit of hassle out of what can be a tedious prospect of dealing with many potential buyers.

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Of course, this report was the first of its kind to actually focus exclusively on automobile and vehicle donations to charity. And what it found shocked the IRS and the Senate Finance Committee that it was delivered to. Indeed, an immediate response was garnered from the IRS to publicly concur with the recommendations of the report that called for rule changes and greater oversight of vehicle donations to charity.

It is interesting to note the the timing of this report was just a year after an influential and scathing article on this very topic appeared in the Washington Post. Though the increased prevalence of ads cajoling people to donate their car to charity certainly merited inspection by someone. Whether an employee of the GAO saw this, or a constituent of one of the Senators on the Finance Committee is unknown.

Regardless, the report, entitled, “Vehicle Donations: Benefits to Charities and Donors, but Limited Program Oversight,” found some glaring problems with the system of automotive donations to charity, even when taxpayers followed the letter of the law when determining their allowable deduction.

For instance, the average deductible represented only between 1-5% of the actual monies accepted by the charity in most cases. The rest of this money was lost by selling the vehicle as quickly as possible on the wholesale market, often taking in less than 10% of the automobile’s value according to even conservative estimates by valuation services such as the Kelly Blue Book.

Of course, part of the confusion arises from the generally unsatisfactory condition of many donations – a condition that was found to be exasperated by offers of free towing of any vehicle with a free and clear title. In fact, most donation organizations (whether operating as a profitable business or non-profit charity) will tow cars as a matter of course, whether they run or not. In contrast, the Kelly Blue Book rating of “poor” still requires the car to move under its own power.

The very prevalent use of third-party donation organizations that represented various charity organizations (sometimes several) caused a great deal of concern, too. It was found that on average, between 60-70% of the relatively paltry revenues from wholesale market sales was then eaten up by the overhead of the facilitating organization that was operated as a for-profit business enterprise over 95% of the time.

Even more disconcerting, many of these third party organizations were found to be engaging in fraudulent or at least shoddy bookkeeping – often lumping all their expenses for a given sale into a single unlikely category. Sometimes, it was found that in many cases the charity that some such companies represented wasn’t even legitimate, making the practice of taking a deduction from such a gift to “charity” technically illegal.

That said, despite the large number of advertisements found on TV, radio and websites, less than a single percent of tax returns filed in 2000 included a vehicle donation to charity. Of course, in a country as large as the United States, that still means that over 700,000 tax returns had itemized deductions for vehicle donations to charity By claiming the “fair market value” of the cars in question rather than the actual sale price, just about each and every one of the nearly three-quarters of a million returns deducted a value that was, on average, 90% higher than the actual revenues received at auction.

It comes as no surprise to anyone that the IRS acted the very next year, especially given the betrayal of public trust that predatory for-profit enterprises represented when invoking the name of charity to solicit donations from unsuspecting Americans who were just trying to do the right thing.

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