Vehicle Donation
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Vehicle donations for charitable causes have become big business in the world of non-profit fundraising efforts. And the process is an easy way for car owners to dispose of an unneeded car. Giving a car to a charity is a little more complicated than giving, say, clothing away. However, the value is greater, too, both in terms of tax benefits to the giver and in terms of real benefit to the charity. Cars are the most typical vehicle donated, but most agencies gladly accept trucks, boats, RV's, motor homes, and motorcycles, too.
This kind of gift can be a unique way for a non-profit group to provide independent transportation to a family in need. Such a gift could also be used for charities that need cars for programs that require transportation or deliveries. A vehicle donation is obviously more worthwhile if the car still has some life left in it, but even cars that no longer run well can still be donated. Some vehicle donations are useful if only for the scrap, but even scrap parts hold some value.
The laws regarding tax benefits for vehicle donations changed to provide more accountability. This took place after the U.S. General Accounting Office (GAO) studied the practice and discovered that misrepresentation (or fraud) was rampant. In their survey, two-thirds of the charities received as little as 5% of the vehicle donation value compared to what the donation was recorded as being worth on the individual's tax return. Any profits from a wholesale auction would be further reduced by advertising costs, towing, conditioning, repair, paperwork, and sometimes even intentional damage. Sometimes the charity received only a flat fee for the automobile, even if the car was worth far more. In response to this, legislation now limits the amount that can be claimed to the total proceeds received by the charity, with additional caveats designed to prevent fraud.
When people are considering donating an automobile to a charity, they should be sure they are working only with well-known charities. If vehicle donations are made to legitimate charities, there will be clear information on the charity's website that verifies it does what it says it will do. The owner must have the title to the car and surrender it when the company takes the car. The donation amount will be tax-deductible only for people who itemize their yearly deductions. Since the new law has been enacted, all charities will now have 30 days to let previous owners know how much money the vehicle donation grossed at auction or if the charity will be using the car towards the mission of the charity. If the car is to be used, the tax deduction can be for full market value. But the more important fact is that giving a vehicle to a charity is, in fact, a true help! "A good name is rather to be chosen than great riches, and loving favour rather than silver and gold. The rich and poor meet together: the Lord is the maker of them all." (Proverbs 22:1-2)
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