Donating a car to charity is a good way to get that clunker off the bricks in the back yard like your wife’s been begging you to do for years. You know you’re never going to actually get around to fixing it up, right? If you kick out the critters, dig out the title, and find a charity that accepts car donations, you can help save the whales, or the environment, or the children.
But finding a charity to donate your car to can be challenging. While some charities accept direct car donations, most go through an intermediary organization, usually a commercial fundraising service, which can cost-effectively process the donation: process the initial contact, pick up the car, handle of all the paperwork, pay the fees, handle the advertising, and transport it to auction or the salvage yard. The caveat is that by the time it’s all said and done and the middleman has subtracted fees, expenses, and overhead and taken their cut of what’s left, the charity may only get a small portion of the proceeds.
How Much Should the Charity Get?
The percentage of the proceeds that go to the charity depend on a number of factors, but typically, a highly reputable middleman will give a full 75 percent or more to charity, while those that are marginally reputable will pass on at least 50 percent. Anything less than that, and chances are, you’re dealing with a bunch of money-grubbers taking advantage of your charitable intentions and cashing in on the misfortunes of those you’re trying to help.
Choosing a reputable charity to donate your car to is essential, but equally important is choosing one that uses a reputable middleman that will pass on a fair share of the proceeds. And trust me, it can be rather difficult to figure out which intermediaries are in it to help charities make a little money while taking a fair share for themselves, and which ones are out to exploit everyone involved in order to profit as much as they can get away with.
Sometimes it seems like an exercise in futility to find reliable sources, accurate financial information and trustworthy ratings for commercial intermediaries. But fortunately, exercises in futility are my forte.
Review of DonateCarUSA
The first thing I always want to know is how much of the proceeds of the sale of the donated vehicle will actually go to the charity. In some cases, that information is so elusive that I have to call a few of the charities listed on the intermediary’s site and ask. This time, though, I hit pay dirt in the FAQ section of DonateCarUSA, which, unlike most intermediary websites, actually answers this question, and it goes something like this: The percentage the charity gets depends on the costs associated with processing the donation and on the sale value of the vehicle. However, DonateCarUSA assures us that the nonprofit will get 50 percent or more of the proceeds.
But do you think I’m going to take their word for it? After skimming through some of the 400 charities you can choose to donate to through DonateCarUSA, I headed over to the Better Business Bureau to see what they had to say about the general trustworthiness of the organization, but they weren’t listed. Having already learned my lesson about the tangled web of affiliates that some intermediary organizations are part of, I decided I’d better see who DonateCarUSA really is.
In the tiny disclaimer link at the bottom of DonateCarUSA’s site, I learned that they have retained the services of Automotive Recovery Services, Inc., doing business as Vehicle Donation Processing Center, to provide the actual vehicle donation services. Vehicle Donation Processing Center is a part of Insurance Auto Auction’s Donation Division.
See what I mean?
Vehicle Donation Processing Center scores an A+ rating with the Better Business Bureau and has been accredited since August, 2000. But remember, an A+ rating only means that they’re established, have a low complaint volume for the size of their business, and the BBB has sufficient background information on them. It doesn’t necessarily mean they’re highly reputable.
I headed over to America’s Worst Charities, a charity watchdog collaboration between the Tampa Bay Times, the Center for Investigative Reporting, and CNN, and found that Vehicle Donation Processing Center is on their list, with three disciplinary actions in Florida and New Jersey, for which they paid a total of $35,376 in fines. However, those violations may simply be due to neglecting to register correctly or on time with the proper authorities, and when you have so many cooks in the kitchen, that’s bound to happen now and then.
Still, out of six charities listed on the site that Vehicle Donation Processing Center worked with between 2008 and 2010, only between 17.6 and 26.7 percent of proceeds were passed on to those charities. That amount is considerably less than what the Washington Secretary of State has on file, which is 72 percent (reported under Automotive Recovery Services, Inc.) However, the SOS points out that this information is based on the data provided to them by the intermediary organization, and that the SOS doesn’t verify the accuracy of the information.
Without going full-blown investigative reporter on all of the entities involved, I knew I wasn’t going to get much further in my research.
The Bottom Line for DonateCarsUSA
So we have DonateCarUSA telling us that they pass on 50 percent or more of the proceeds to the charity. We have America’s Worst Charities putting that number as low as 17.6 percent, and we have the Washington Secretary of State’s office putting it at 72 percent. It’s really hard to know whom to believe, and impossible to know the mitigating circumstances and the actual truth behind any of those numbers.
My verdict? Proceed with caution when working with DonateCarsUSA. If you absolutely must donate to a charity that uses this intermediary organization, do your due diligence and call the charity to find out how much of the proceeds they’ll get. If it’s less than 50 percent, find someone else to donate your car to, or just leave it there on the concrete blocks and consider it your very own backyard wildlife habitat.