You’ve probably seen ads on the Internet and on TV that encourage you to donate your car to charity. That’s because companies that exist solely to broker the deal on behalf of the charity typically make lots and lots of money, and they, unlike most charities, can afford to throw money at expensive airtime and high performing online advertisements.
Now, don’t get me wrong: I’m not against making money. But the unfortunate truth is, a lot of these intermediary car donation organizations don’t give a rat’s whiskers about supporting charitable causes, even though doing so is purportedly their sole reason for being in business. Even reputable organizations may keep half of the proceeds, while those that are less reputable may keep up to 90 percent for themselves.
Think about it: you donate your junk car, and it sells for $200, which could, for example, provide meals for 909 hungry kids through a reputable charity. But choose the wrong middleman, and the charity gets a paltry $20. Twenty bucks! It’s a sad state of affairs, folks, but that’s why I’m here.
Are Middlemen Inherently Evil?
Not all car donation intermediary organizations are villains, though. It takes time, manpower, and money to sell cars, and charities often don’t have those luxuries. By using a reputable middleman that passes on a fair portion of the proceeds, charities can benefit greatly from your donation. Ideally, the middleman should pass on 75 percent or more of the proceeds to the charity, although 60 percent is considered satisfactory. If the middleman keeps more than 40 percent of the proceeds, though, you should either find a reputable charity that accepts direct donations or an intermediary organization that gives the charity a bigger slice of the pie.
Review of Car Donation Services, Inc.
So today, we’re looking at Car Donation Services, Inc., located in Martinez, Calif., which partners with over 60 Bay Area charities of all stripes. In operation since 1990, CDS accepts working and nonworking cars, trucks, motorcycles, vans, boats, RVs, trailers, and some industrial equipment. As their website says, “If it has wheels, we can probably accept it.” The one caveat is that the vehicle must be registered in the State of California or, if it’s not currently registered, California must be the last state in which it was registered.
The CDS website is professional, well organized, and chock full of information about why you should choose them and how their services work, which is very simple and requires minimal action on the donor’s part.
But of all the information provided on the website, the actual percentage of proceeds that goes to the charity is conspicuously absent. Car Donation Services claims a higher than average selling price, due to the many avenues they pursue in looking for the highest sale price for the vehicle, such as e-bay, Craigslist, private and public car auctions, and retail, wholesale, and consignment outlets. They reason that the higher the selling price, the more money that goes to charity and the higher your tax deduction.
Fine, but I’m a bit of a skeptic, so I did some digging around to see what I could find out. I started with Yelp, which is more of a barometer than a scientific measurement of quality. A single rave review from 2009 resulted in a four-star rating for CDS, but that could have been written by anyone, including the organization’s CEO.
So I headed over to the Better Business Bureau and was pleased to see that CDS has been accredited since 2009 and carries an A+ rating. Now, keep in mind that the rating only means that the business meets the BBB’s accreditation standards. It doesn’t mean that the services they provide have been evaluated or endorsed by the BBB.
But What Percentage Goes to the Charity?
I can’t stress enough that the most important deciding factor when using a middleman is the percentage of proceeds that goes to the charity. And that’s where I ran into a brick wall in my online research. I did find a great site called The Car Donation Review, which provides information on various car donation organizations, but CDS wasn’t listed.
So I got on the phone and called CDS. After a very short wait, I was connected to a friendly, helpful agent who didn’t have the information I needed, but she took my phone number and said she’d pass on my query to the administrative office and have someone call me back.
Meanwhile, I called one of the charities on the CDS list, after doing a quick check with Charity Navigator, a nonprofit watchdog group, to confirm its reputability. According to the charity, CDS gives them 50 percent of the proceeds.
Shortly thereafter, CDS got back to me (that was quick!) and said that 60 percent of the proceeds goes to the charity.
Hmmm… so which is it?
So I called another reputable charity on the list and spoke to Cathy, who told me that CDS keeps four percent and gives the charity 96 percent. “Seriously?” I asked. “Are you sure? That seems really high.” Cathy assured me that CDS does, indeed, give them 96 percent.
Did I mention that I’m a skeptic? I called one more charity on the list for good measure and spoke to Stacey, who informed me that CDS keeps 40 percent and gives the remaining 60 percent to the charity.
The Bottom Line on Car Donation Services, Inc.
Car Donation Services is a legitimate and reputable organization that gives anywhere from 50 to 96 percent of the proceeds of the vehicle’s sale to the charity you choose from their list of beneficiaries.
Before you donate your car through CDS (or any other organization,) investigate your chosen recipient at Charity Navigator, then call the charity directly and ask what percentage they get. If it’s 75 percent or more, you can feel great about donating your car to them through CDS. If it’s 60 percent or more, you can feel pretty good about it. If it’s less than 60 percent, you might consider choosing another charity to donate your car to.