American Red Cross Vehicle Donation Review

American Red Cross Vehicle Donation

The Red Cross logo, a bold red “+” sign against a white background, is easily recognized and highly respected by the majority of the population worldwide. The American Red Cross is part of the International Committee of the Red Cross, the world’s largest humanitarian network, which features over 13 million volunteers in 187 countries to provide disaster relief, create safer communities, and teach international humanitarian law (the rules of war) to youth, educators, and law and policy professionals.

A 501(c)(3) nonprofit corporation officially registered with the IRS as The American National Red Cross, the Red Cross’s mission to provide humanitarian aid is supported primarily through corporate funding and individual donations and relies on a huge network of volunteers to carry out their work. There are a number of ways to support the Red Cross, and donating your old vehicle is one of them. In 2012, the Red Cross received $3,300,111 in proceeds from the sales of donated vehicles.

The Red Cross Vehicle Donation Program is operated by Insurance Auto Auctions, a gigantic and reputable auto auction company whose Donation Division handles vehicle donations for hundreds of national charities. Insurance Auto Auctions Donation Division uses its own in-house national vehicle donation program, One Car One Difference, to handle vehicle donations for most of the charities it partners with.

Over 130 Years of Humanitarian Aid

Most of us have at least heard the name Clara Barton. A formidable force for good, Ms. Barton and a few of her pals founded the American Red Cross on May 21, 1881, adding the support of the United States to the esteemed International Committee of the Red Cross, which was founded in 1863 in Geneva, Switzerland.

Stateside, the American Red Cross is the largest single provider of blood and blood products for the American population. Four million individuals donate blood to the Red Cross every year, accounting for over 40 percent of our domestic blood supply. The Red Cross is the number one provider of health and safety courses, including CPR, first aid, and lifeguard training, and it’s the premier domestic disaster relief organization, responding with humanitarian aid to victims of hurricanes, earthquakes, and other catastrophes. The Red Cross also provides aid to military personnel, such as facilitating emergency communications and supporting wounded warriors and vets.

The American Red Cross on Guidestar

Whether you’re donating time, money, or goods like vehicles, investigating your chosen charity beforehand is essential for making sure your donation will be used primarily to further the mission of the organization rather than to pay salaries and other administrative costs or support fundraising efforts. The most efficient charities spend at least 75 percent of their revenue on programming, with the remaining 25 percent going toward administration and fundraising.

This information is quick and easy to find at Guidestar, a nonprofit organization that compiles the IRS Form 990s and other information on every charity registered as a 501(c)(3) nonprofit. Part IX of Form 990 breaks down the charity’s expenses for the year into the three main categories (programming, administrative support, and fundraising.) According to the American Red Cross’s 2012 Form 990:

  • Total revenue was $3.35 billion.
  • $3.03 billion, or about 90 percent, was put toward programming.
  • $129.9 million, or about 4 percent, went toward administrative costs.
  • $189.4 million, or about 6 percent, was used to raise funds.

That’s one highly efficient charity right there, folks!

Warning: Intermediaries Aren’t Always as Efficient as the Charities They Serve

Most charities use an intermediary to handle their vehicle donations, usually a commercial or nonprofit fundraising organization. Unfortunately, many intermediaries are about as trustworthy as a four-year-old in a room full of candy and will gouge the charity at every turn, in the end passing along just pennies on the dollar from the proceeds of the sales of the donated vehicles.

  • Highly satisfactory intermediaries forward at least 75 percent of the net proceeds to the charity.
  • Moderately satisfactory intermediaries pass along between 60 and 74 percent.
  • Unsatisfactory intermediaries give the charities 50 to 59 percent of the net proceeds.
  • Highly inefficient or downright dirty intermediaries pass on less than 50 percent of the proceeds and should be avoided at all costs unless you want to help make shady and unscrupulous characters a lot of money.

Review of the Red Cross Vehicle Donation Program

The Red Cross Vehicle Donation Program partners with Insurance Auto Auctions, a leading auto auction company that specializes in selling vehicles at over 150 auction centers across the country.

The Red Cross Vehicle Donation Program’s FAQ page includes the question, “Who is Insurance Auto Auctions?” The Red Cross response:

“The Red Cross partnered with Insurance Auto Auctions’ Donation Division after a national search because of its ability to provide consistent returns and services across the majority of the area served by the Red Cross. IAA’s Donation Division handles the entire vehicle donation process on behalf of the Red Cross, from the initial call or online inquiry to providing the donor services once your vehicle is sold.”

Too many charities don’t do their homework when engaging the services of an intermediary and as a result, see far fewer funds than they would if they put some time and effort into screening these organizations.

Insurance Auto Auctions typically passes on 70 percent or more to the charities they work with, according to a number of reputable charities and the Office of the Attorney General of the State of California.

The Bottom Line for the American Red Cross Vehicle Donation Program

I love it when I can tell readers to go forth and donate their vehicle to a deserving charity through the charity’s equally efficient and reputable third party intermediary.

Happily, this is one of those times. By all means, offer the Red Cross your old car, truck, van, RV, boat, motorcycle, farm equipment, or whatever else you have lying around that moves by way of wheels. The vehicle will be sold, and a substantial portion of the proceeds will go toward funding the Red Cross’s mission of offering humanitarian aid to people in need here in the United States and beyond.

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