Charitable Car Donations – How To Pick The Charity And Do The Paperwork Quickly
In the past years, more and more Americans are making charitable car donations alongside other cash and non-cash items. We should not be surprised as cars are one of the most disposable assets in our mobile society with newer models being introduced on a yearly basis, thus, spurring the perceived need of always wanting a new car.
But of course, it is not just the altruistic motive that spurs these car donations. The tax benefits from car donations can be substantial so much so that millions of Americans have lowered their federal taxes payable by over $650 million in 2000.
As with anything in our modern democracy, even the most philanthropic efforts entail legal rights and responsibilities. Car donations to eligible organizations are no exception. With that thought in mind, here are a few tips on the best ways to make charitable car donations.
Donate to a Charity Accepting Direct Car Donations
Many for-profit intermediary organizations will keep 50-90 percent of the proceeds of the car sale for themselves. The intended beneficiary will then only be able to enjoy 10-50 percent of the proceeds, which will go against the grain of your donation in the first place.
Of course, you will be able to find an intermediary organization that will take as little as $20% of the proceeds to cover the costs of the transfer but you have to do your research. We suggest asking the intermediary organization about their percentage and then inquiring of the charities if, indeed, the percentage provided is true in past donations. Better yet, you can inquire from the Better Business Bureau.
But the best way to make charitable car donations is to go the DIY route. You can find a charity that accepts direct donations of cars or you can ask your favorite charity for their program on direct car donations. You will then have the assurance that 100% of the proceeds of the car sale go to the charity or that the car itself will be used by the organization in the furtherance of its goals.
Donate to an Eligible Organization
Unfortunately, you cannot just give car donations to every charitable organization in the country. The law is very specific about the types of organizations in which donations can be considered as tax-deductible and that provision is contained in the 501 (c) (3) of the IRS code. To quote said provision:
“Religious, Educational, Charitable, Scientific, Literary, Testing for Public Safety, to Foster National or International Amateur Sports Competition, or Prevention of Cruelty to Children or Animals Organizations”
If the definition seems too broad, you can always ask a lawyer or an accountant to determine if the organization you have in mind falls under this category.
Donate Complete with Paperwork
Naturally, you should make the car donation with complete paperwork. The most important part of the paperwork is the signing over of your rights and responsibilities over the car to the chosen charity mainly by ensuring that the assignment of ownership space on the donation papers is completely filled out with the name of the organization. If you leave it blank, you are still responsible for the car under the eyes of the law.
In conclusion, your generous act of making charitable car donations is laudable. But what is more admirable is being a stickler for the legalities that come with the donation.