Donate A Car to Charity – Or Raffle a New One!

Many people want to help a favorite charity, but do not have the ability to make a monetary donation. Why not donate a car!

Even though a financial donation may not be possible, there is another way that you can help the charities you care about.

10 Tips on How to Donate a Car

Easy Right? You’ve heard the spiel, call your favorite charity, have them come get your car, avoid the aggravation of trying to sell it, and score yourself a nice big fat tax deduction. Everybody is happy right?

Not so fast Mr. Donator. Read our foolproof tips below before you just hand over a major asset like a car or boat;

  1. Make sure it’s a worthy charity. Do your research. Make sure they take such donations. Also make sure that as much of your donation goes towards the cause as possible. We like using Charity Navigator and the Better Business Bureau
  2. Deal directly to the charity. Middlemen can keep as much as 50 to 90 percent of the car’s value. Many of these for-profit middlemen companies advertise aggressively on billboards, magazines and TV. They might have a cute kid singing a cute song about helping out their cause to lure you in. Some of these companies may be for-profit organizations.
  3. Do the math. If you still feel compelled to use a middlemen for-profit charity, at least ask how much of the car’s value will go to the cause. If it is just a flat fee of $50, you might not be eligible for any tax deduction from the IRS.
  4. Check the recipient’s status. Are they an IRS approved 501 (c) (3) charity? They need to be if your car or donation is to qualify for a tax deduction. Most churches do qualify. Type in publication 78 into the IRS home page to make sure and to find other qualifying charities that will take your car.
  5. Drop the car off yourself. Here’s a top tip. Take the car in yourself if it is running or you can afford the tow charge. The charity has to pay for this towing, so you will be guaranteeing the max benefit to your chosen cause.
  6. Do the transfer yourself. I see this all the time, you assume the transfer will be done properly and 6 months later you receive a parking ticket or other violation in the mail. Eliminate this risk by transferring the car yourself directly to the charity. Re-title the car and contact the DMV.
  7. Don’t guess at your write off. A car or boat worth over $500 will need the proper paperwork of what the charity sold it for. ( Most charities take your car and immediately flip it for cash) Reputable charities will happily supply you with this information.
  8. Fair market value. If the charity keeps the vehicle and uses it for its own charitable work or if your car or boat is worth less than $500 then you can use the Kelly Blue Book to report the amount of the deduction.
  9. Keep all records. Get IRS form 8283 if your car is worth more than $500. If it’s worth more than $5,000 you must include an appraisal from a reputable company also as well as the receipt from the charity.
  10. Rinse repeat. After completing one donation, keep all your details together so the next one will be easy. Remember, large tax deductions such as a car get scrutinized by the IRS so be very detailed oriented.
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Follow 10 tips from above and you will feel good about helping your worthy cause without dealing with any frustrations from the IRS.

The Story of One Church & How They Donated a Car to Fundraise

The members of a church thought that their pastor had lost his mind when he said that a great way to raise money would be by giving away a car. Not just any car would do. It had to be a brand new car with every available option.

The church was in the midst of raising money for an aggressive foreign missionary project, and the church bank account needed a little extra boost.

That is when the pastor came up with the idea for a car raffle. He negotiated a deal with a local car dealer that allowed him to take the car now, but pay for it at the end of the raffle. This allowed the church to display the car with a sign “WIN THIS CAR” without having to pay for it up front.

Because it was for a charitable group, the dealership gave the church a good price, but the final cost was still going to be $22,000.That’s a lot of raffle tickets.

Even the pastor admits that he was nervous, but he thought it was worth a try. He thought that the worst case scenario would be that they would be break even. He never considered the possibility that they would wind up in the hole.

Ticket prices were set at $20 each. That is a lot of money for a ticket, but because the potential prize was so big and the cause was considered by many to be worthy, people were willing to pony up. The $20 price tag meant that the group would have to sell 1100 tickets to break even. Anything after that would be profit.

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Since the congregation was on the small side with only 300 members, selling that many tickets would take some aggressive action on the part of the church members.

The period for which tickets would be sold was set at two months. During the first month, only 750 tickets were sold. While at the first part of the month, the tickets were selling at a pretty good pace, sales had slowed way down.

The pools of families, co-workers and neighbors of the congregation had been exhausted. Everyone was getting nervous. A new strategy was needed.

That is when someone came up with the idea that turned this fundraiser from a near disaster into a very successful event. They purchased tables at local car shows and flea markets and spent the final four Saturdays of the event selling tickets at places with very heavy foot traffic.

At one car show alone, 250 tickets were sold. Instead of visiting the same places each Saturday, they chose a different location each time. This was a good strategy because they were in front of a different crowd each Saturday, rather than seeing the same faces that had purchased tickets the week before.

When the day came for the drawing, they had sold a whopping 1974 tickets! The grand total of their profit, after paying for the car, spots at the flea markets and car shows and advertising was $15,580!

While the event ended up as a great success, the group also said that they would never do it again. The stakes were too high should the tickets not get sold, and it was a LOT of work and ended up being very hard on the congregation.

While this event has the potential to bring in some big money, it also carries some big risks and that should be carefully considered before your group decides to try such a fundraiser. It’s best suited for very large groups. If your group is small, try joining with other groups if you want to try this.

Whether raffling a car is the right fundraiser for your group or not, this story proves that with the right combination of creative thinking, hard work and persistence even fundraisers that appear to be tanking can be turned into a success story.

Donate your Car and More

By donating items, such as a car, clothes or furniture you can help organizations carry out their mission in your community.

The key is finding the right charity for your items. Many charities would be happy to receive donations of helpful items, but it’s important to remember that not all charities can use all items.

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It’s best to take a little time to call and check with the organization to which you’d like to make a donation. Find out what items they need.

Otherwise, such donations could become a burden, especially to groups that are operating in tiny office spaces and have no room to store donations of large items or bags of clothes and toys.

Some charities, such as the Glass Slipper Project in Chicago, need very specific items in order to change the lives of people they are trying to help. The Glass Slipper Projects makes dreams come true by helping low-income girls get ready for their proms.

They are always in need of prom dresses in all sizes, shoes and other accessories. Similarly, the group Dress for Success helps disadvantaged women by properly outfitting them for the workplace, so the need for business attire donations are helpful.

While donations of clothes would be most welcome by the above mentioned groups, it’s easy to understand why similar donations may not be helpful to a sports team or a group that cares for animals. On the other hand, it’s doubtful that Dress for Success would have much need for a truckload of kitty litter, while the local humane society would love to have such a donation.

Many organizations have developed a “wish list” of items that they need most. Ask for a copy from the charities you’d like to help. If the group you choose does not have a wish list, then ask them if they are interested in the specific items you have available.

If you cannot find any group that needs the items you have, you can always donate them to your local Salvation Army or Goodwill Thrift Store. The items will be sold in the store and the money will help to fund the charitable projects sponsored by each group.

In addition to helping a worthy cause, donations of goods, such as cars are almost always tax deductible. To best take advantage of these deductions, always ask for a receipt when donating items to a charity. Check with your tax professional to learn details about deductions for charitable donations.

Don’t feel like your donation of goods is less important than money. It’s the generous donations of all supporters that make it possible for charitable organizations to do the good work they do.

So, go clean out those closets for a good cause!