U.S. military veterans hold a special place in our hearts, regardless of our political position on war and government spending. There is a large number of stellar organizations that work tirelessly to help veterans in numerous ways. The Military Order of the Purple Heart Service Foundation, Inc., also known as “Purple Heart Foundation,” is a 501(c)(3) charity whose mission is “to provide services, welfare, and rehabilitation support to veterans.” Purple Heart Cars is their vehicle donation arm, which generated $5,978,164 in revenue from car donations in 2013.
Purple Heart Cars is run by Purple Heart Services, Inc., which, according to the Purple Heart Foundation’s IRS Form 990, is a related tax exempt organization controlled by the Purple Heart Foundation. The primary function of Purple Heart Services, Inc. is to “raise funds to provide jobs, training, and education” to veterans.
The proceeds from the sales of the donated vehicles are used to support a number of local and regional programs run by Purple Heart Foundation, including:
- Purple Heart National Service Officer Program, which provides soldiers with expert counseling regarding military benefits and helps identify and help homeless vets.
- Purple Heart National Appeals Office, which provides legal representation for vets who have had benefits denied.
- Purple Heart National Outreach Programs, which provide education to veterans about benefits and entitlements.
It’s important to note here that these organizations are in no way affiliated with two other similar-sounding car donation organizations, Cars Helping Veterans and Purple Heart Donations.
How Car Donations to Charity Work
The world of car donations to charity is rife with greedy little hands that would take candy from a baby or snatch an old lady’s purse in broad daylight. These are organizations run by the dregs of humanity who are out to make a few bucks at the expense of charities that could really use their help.
Identifying the good car donation organizations from the bad is often very difficult, because some organizations that “work” on behalf of charities work even harder to hide information about who they really are and how much money they actually pass on to charity. Some organizations operate under a whole bunch of different names and are run by disreputable intermediary organizations and commercial fundraisers whose transparency, to put it mildly, leaves a great deal to be desired. Many of these organizations take the donated cars, sell them, pocket up to 90 percent of the net proceeds, send along a little spare change to struggling charities, and get very rich in the process.
If a car donation program gives 50 percent or less of the gross proceeds or 60 percent or less of the net proceeds to charity, you should find another organization to work with, because your charity may end up getting $50 from a car that sells for $500. In general, you only want to work with organizations that consistently pass on at least 70 percent of the net proceeds.
Another important consideration when donating your car to charity is the efficiency of the charity itself. Donating a car to an inefficient charity through a crooked intermediary is like heading down to a soup kitchen with the intention of helping out, putting one piece of lettuce on someone’s tray, and then calling it a day. You may as well leave the car to rust out in the alley, for all the good it’s doing.
Finding out all of this information can be a major pain in the you-know-where, but happily, chasing down Purple Heart Cars wasn’t all that difficult.
Review of Purple Heart Cars
So we have Purple Heart Cars, which is operated by Purple Heart Services, Inc., which is a tax-exempt organization controlled by the Purple Heart Foundation, a 501(c)(3) nonprofit charity whose mission is to provide services, welfare, and rehabilitation support to veterans.
First, I headed over to Guidestar, a nonprofit organization that compiles information on every single charity registered with the IRS as a 501(c)(3) nonprofit. Anyone can view this information by creating a free Guidestar account. According to their 2013 IRS Form 990, Purple Heart Foundation received $32,045,413 in contributions, which included $5,978,164 from the proceeds of donated vehicles.
Of this amount, only 34 percent went to fund programs, which isn’t that great. An impressive 7 percent was used to cover administration costs, which is really good. But the bulk of Purple Heart Foundation’s revenue, a full 59 percent, went to fundraising. Not really good at all.
The most efficient charities put 75 percent or more toward programs, with the remaining 25 percent split between administration and fundraising. So while the Purple Heart Foundation spent $18,907,140 on fundraising, only $10,809,039 went to fund programs. Still, Purple Heart Foundation is a legitimate, respected charity that does very important work for vets, if not as efficiently as we would like. If you’re particularly drawn to their programs, you can at least rest assured that your donation won’t go toward paying for diamonds and hot rods for the charity’s administrators.
Purple Heart Cars, the car donation arm of Purple Heart Foundation, is pretty darned efficient, though. Lenae at Purple Heart Foundation assured me that only 10 percent of the net proceeds goes toward administrative costs and to cover the actual costs associated with the donations. That’s a much better percentage than even the most efficient car donation organizations can claim, and it’s likely due to the fact that there are no third party intermediaries involved.
The Bottom Line on Purple Heart Cars
Purple Heart Cars is a legitimate and efficient car donation program run by Purple Heart Services, which is controlled by the respected (but not highly efficient) 501(c)(3) nonprofit charity, The Military Order of the Purple Heart Service Foundation.
Ninety percent of the proceeds of the sale of your donated car will be given to Purple Heart Foundation, which will use about 35 percent of that amount to help fund a wide range of programs that directly benefit veterans.
Your car donation proceeds might be put to better use at a more efficient charity, but if you’re specifically looking to help fund the Purple Heart Foundation or any of the programs they offer, you can donate your car to this organization without feeling dirty about it.