Car Donation Scams to Watch Out For

The Middleman Problem

The vehicle donation industry is rife with for-profit "middlemen" who set up slick websites, collect cars on behalf of charities, but keep 80% to 90% of the profits for themselves under the guise of "administrative and marketing fees."

How to Verify a Charity

Before you hand over the keys to a tow driver, ensure the organization passes these three tests:

• Are they a real 501(c)(3)? Never donate to an organization that cannot immediately provide their IRS Employer Identification Number (EIN). You can look this EIN up on the IRS Tax Exempt Organization Search tool.
• Are their programs transparent? Look closely at their website. Do they actually run programs themselves, or are they just a generic "fundraiser"? Patriotic Hearts, for example, directly runs the HirePatriots job board and US Military Clean franchise initiatives.
• Are they promising vacation vouchers? Be extremely wary of charities offering free cruises, grocery cards, or vacations in exchange for a clunker. Often times, these "vouchers" are timeshare presentations or cost more in fees than they are worth, and they lower the legal amount you can deduct on your taxes anyway.