Donate for Charity, Inc. is a commercial fundraising organization that handles the vehicle donation process from beginning to end for the charities that contract with them. They work with hundreds of charities across the country, and they appear to be one of the few good guys.
The Car Donation Process in Seven Steps
Charities contract with commercial fundraising organizations like Donate for Charity so that they can accept vehicle donations without spending a dime, and they can potentially see quite a lot of money coming in from the generosity of their supporters who want to rid themselves of an old vehicle.
Here’s how it works:
- A charity contracts with a commercial fundraising organization that processes vehicle donations.
- Jane Doe decides she’s going to donate her estranged husband’s prized first car, a 1978 AMC Gremlin, to her favorite charity. She contacts the charity, and they tell her that they will gladly accept the donation, which will be handled through Acme Vehicle Donations.
- Jane calls Acme and gives them all of the essential information about the car. They tell her a tow truck will arrive the next day to take the car away.
- The next morning, a tow truck arrives, and the driver has Jane fill out a couple of simple forms. The prized Gremlin is hauled off for good, much to Jane’s glee. She always hated that stupid car. Jane won’t even think about the donation again until she gets a letter of acknowledgement from the charity and a receipt from Acme after the deal is done. These documents tell Jane how much the car sold for so that she can deduct the sale price on her taxes.
- The vehicle is towed to the auction house, where it sells for $500. That’s the gross proceeds.
- The auction house takes their cut of, say, $100 and sends the rest of the money to Acme. That amount is the net.
- From the net proceeds of $400, Acme takes out their administration costs and fees, which shouldn’t be much more than 25 percent of the net proceeds if they’re a reputable, fair, and efficient commercial fundraiser. Acme is reputable, fair, and efficient, so they take $100 and send the remaining $300 to Jane’s charity of choice.
Fundraiser or Front?
Now, not all commercial fundraisers are reputable, fair, and efficient. In fact, you can’t throw a rock without hitting a dozen that are disreputable at best or downright dirty at worst, but you have to aim very carefully to hit one that’s run efficiently by decent people.
- An intermediary that passes along 75 percent or more of the net proceeds to charity is considered highly satisfactory.
- An intermediary that passes along 60 to 74 percent of the net proceeds is considered somewhat satisfactory.
- An intermediary that passes along 50 to 59 percent is unsatisfactory.
- An intermediary that passes along less than 50 percent is highly unsatisfactory.
Some commercial fundraisers are no better than highway robbers. They claim to process car donations for the benefit of charity but end up keeping the vast majority of the funds for their own coffers, passing on just 15 or 20 percent of the net proceeds to the charity.
Additionally, you run into nonprofit organizations that process car donations for other charities, and while there are those that are truly nonprofit organizations, there are others that basically serve as a front to make the officers filthy, nasty rich.
So Which is Donate for Charity, Inc.?
Donate for Charity, Inc. knows that there are some really slimy car donation intermediaries out there, because they devote a lot of the space on their website to detailing why they’re so different. One thing that comes up again and again is the fact that they pass on 70 to 80 percent of the net proceeds to charity, depending on the sale price of the car (they note that the percentage the charity gets increases as the sale price of the car increases.)
I never, ever take a commercial or nonprofit fundraiser’s word for it, though, so I headed over to the California Attorney General’s Office. The State of California requires commercial fundraisers to file detailed paperwork for every transaction, and they provide a searchable database for consumers to use when trying to determine whether a commercial fundraiser is Mother Theresa or Bernie Madoff, or somewhere in between.
In 2005, the most recent year on file, Donate for Charity, Inc. brought in $10,000 in revenue from the sales of cars and trucks in the State of California. Of that amount, $725 was retained for towing fees, $700 was retained for administration fees, and $751 was retained for auction fees, for a total of $2,176 in costs directly associated with vehicle processing. The remaining $7,824 comprised the net proceeds, of which Donate for Charity should have, if they’re not full of moldy crackers, passed on between $5,476 (70 percent) and $6,259 (80 percent.)
And they did! They sent $5,591.67, or 71 percent, along to the charities that contracted with them!
The Bottom Line for Donate for Charity, Inc.
By all means! Let Donate for Charity take possession of that heap of junk that’s hogging all that space in your garage. They’ll turn it into cold, hard cash and send along a perfectly respectable portion of the proceeds to the charitable organization of your choice.
Donate For Charity has received our 5 Star rating, our highest possible rating.