5 Tips To Avoid Car Donation Scams
Here are 5 tips to keep your generous charity car donation safe from the scam artists who mask themselves as charities, but in reality are nothing more than shady businesses who use car donation scams to profit from your kind nature.
1) Cut out the middleman and donate directly to charity
You will find that most car donation scams are run by companies who work as a middleman between the public and various charities. This is not to say that all middleman organizations are corrupt when it comes to the car donation process. However, for you to be sure your donation is doing the most good for people in need, it is good practice to donate your car or truck straight to charity. Charities like the American Red Cross, Salvation Army, and purpleheartcars.org who help disabled war veterans, all accept vehicle donations. You will find a list of reputable charities and their website details on this page : Car Donation Charity
2) Check if the organization is an official IRS registered charity
In order to get a car donation tax break from the IRS, you will need to make sure that the organization you are donating to is an IRS 501 (c)(3) official charity. You can find a list of official charities here : IRS Publication 78 It is important to check this information yourself as most charity and middleman websites will state that they are an official charity. Unfortunately this can be misleading as it does not necessarily mean that they are on the list of official charities. It could be the case that they donate a proportion of proceeds received to charity and could be in the process of obtaining official status, or that their charity status may have lapsed for some reason.
If the organization was not on the official IRS 501 (c)(3 list at the time of your donation, then your car donation will not be eligible for the tax deduction that you entered on your tax return. You could then be forced to pay back any tax back that you received, including penalties and interest, as the IRS will hold you responsible for not checking directly with them.
3) Use a local charity if possible
Another way to avoid car donation scams is to give your donation to a local charity. If the organization that you are considering donating your vehicle to is vague on the program they provide, or it is unclear what areas the organization works in, it is possible that you have found a car donation scam company, and you should probably look elsewhere.
One added benefit to donating to a local charity is that you can go and check to see how they work, and to who they provide for with the proceeds of your donation.
4) Background check
You can do a background check on the charity you are considering donating a car to by checking for a rating and any reviews on the organization in question by going to either the Better Business Bureau, or Charity Navigator. You will find links to both of these organizations on the sidebar on the right of this page. These websites will provide detailed information and guidance on each charity.
5) Check the percentage that actually goes to those in need
The government does not enforce a minimum percentage that must go to charitable causes from each donation. This is how the car donation scams are allowed to flourish online because the shady organizations can donate any percentage they like to a charitable cause, even as low as 1 %, and still keep their charitable status.
You can usually find the percentage used for good causes on the charity website. If not available, you will find this information again on the Better Business Bureau, or Charity Navigator websites. The higher the percentage – the greater difference your car donation will make to those in need.
These simple tips should be enough to steer you away from the several car donation scams that prevail online. You will be providing the biggest bang for your donated bucks that will go to a good cause, while keeping your car donation tax deduction safe from any problems when it comes to filing your tax return.
