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Dec 2, 2008 11:00 pm US/Eastern
Little Of Car Donations Make Way To Charities
Car Donators Beware Of Actual Amount Given To Charities
BOSTON (WBZ) ―
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After this 1987 BMW-635 sold on auction for $525, the charity the proceeds were to go to only amounted to $270 after third-party fees.
WBZ
Tis the season of giving, and now the need is greater than ever. So those donating to a charity hope every penny makes a difference. But I-Team reporter Kathy Curran did some digging into car donations and discovered when people donate vehicles all too often only a small percentage of the value of the car makes it to the charity, putting the brakes on charitable giving.
Ken Anderson wanted to help out so he decided to donate his old BMW to the
Concord Friends of the Aging.
"I found out you could donate a car," he explained. "I thought that would be a great way to make a difference."
Anderson decided to give through the
Donation Line, not realizing it was a for-profit company, and what he thought was going to be a generous donation quickly dwindled.
The I-Team tracked three different cars that went to three different charities to see how much of your dollar actually makes it to the charity and makes a difference.
We discovered Anderson's and the other donated cars when police raided Run-Rite Auto Sales -- an alleged unlicensed used car dealership in Lawrence.
Among the vehicles on the lot were cars donated to charities and sold at auction.
We traced the titles to the owners and the owners to the charities.
Anderson's car was a 1987 BMW-635 with a book value of $3,995.
Donation Line says it sold at auction for only $525. Only $270, which is only 7 percent of the book value, made it back to the charity.
"I found that disturbing that so little of my donation got back to them," Anderson said.
"Donation Line brings a steady flow of small gifts without any trouble," said Mary Anne Mortenson with the Concord Council on Aging.
Every little bit counts but the state sends this warning: it's not buyer beware but "giver beware," said Attorney General Martha Coakley.
Coakley says any time the donations are funneled through a third party, especially a for-profit company, the flow of donations are more like a trickle.
"I they give their title over to a for-profit company very little, a small percentage of that may find its way into the actual charitable organization that would be the beneficiary of their giving," Coakley explained.
Donation Line sent an e-ail saying, "All the administrative support services needed to launch and maintain a vehicle donation program is provided by Donation Line. Donation Line is an accredited Better Business Bureau member with a perfect record."
An Isuzu Amigo was donated to Charity Cars of Florida, a non-profit that either rehabs old cars for needy families or sells the cars at auction. The estimated book value of the Amigo was $6,600. The car sold at auction for just $1,650, 23 percent of the book value or $1,500 went back to Charity Cars.
The CEO of Charity Cars says donors should understand that auto-value guides are not real-life values and that the value is determined by the condition of the vehicle and what someone is willing to pay for it.
A Volvo was donated directly to the
American Cancer Society.
The estimated book value on the car was $1,800. The car sold at auction for $1,400 and $1,257-- almost 70 percent of the book value went to help cancer research.
"We are able to have cars picked up by our vendors and then they are sold directly to wholesale dealers, there's no middleman," Kelli Barry with the American Cancer Society.
Back in Concord, even though they're thankful for every donation they're ready to make a deal that may help these seniors even more.
"If they've got a BMW in the backyard and they want to sell it for lots of money and split it with the Concord Friends of the Aging, I'd be thrilled," said Mortenson.
"I just want to give them as many resources as possible to run their programs and make a difference for the seniors," Anderson said.
Ken says next time he'll sell the car on his own and give the money directly to the charity. The bottom line is, do your homework and find out the costs behind each donation. According to a 2003 federal report, most charities received five percent or less of the book value of donated cars.
The tax law was changed in 2005 because of the disparity between the book value of the car, which people could deduct off their taxes, and the actual amount that went to charities. Those who donate their cars can only deduct the amount the car sells for or a minimum of $500.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
