What happens to cars that are donated to charities? | KALW

What happens to cars that are donated to charities?

Dec 21, 2017

 

Listener Mark Eastman from East Palo Alto contacted KALW’s collaborative reporting project, Hey Area. He wants to know, “What happens to cars that get donated to charitable organizations?”

To answer Mark’s question, I first make a visit to an East Oakland neighborhood, right outside of the Fruitvale area. I’m here to visit Pat Kesee. She lives in a house on the block. As usual, she gives me a warm greeting at the front door.

“Hey baby, come on in,” she says.

Yes, Pat Kesee is my mother. We walk into her living room and start talking about cars; specifically her blue, sporty, 1976 Camaro.

The donor’s process

“I got that Camaro when I was pregnant with you and living in San Jose,” she reminisces. “It was my first car and every time I took it out, someone admired it. It was just a fun car.”

My mom drove that car for a good 10 years before it started malfunctioning in 1989. It sat in her garage for decades. Eventually, she decided to donate the car to charity because it would cost too much for repairs.

“It was inoperable. All the tires were flat, the handles on the window were no longer working. It was just in bad shape.” she says.

That Camaro was still worth something, though. So, my mom donated her vehicle to Kars4Kids earlier this year.

“Everything was done online,” she explains. “They ask specific questions, like make, model, the year of the vehicle. They do want to know the condition. And so I put that information in and got an email back very quickly from them about the company that would be towing the vehicle.”

After the tow truck picked up her car, they brought it to an auto auction. There are car auction houses throughout the Bay Area. Some are only open to car dealers, some are open to the public. I contacted a number of car-auction houses and they didn’t respond to my requests, so I wasn’t able to visit one. But it was at one of those auto auctions that my mom’s car was sold for $1,000.

The charity’s process — and earnings

Kars4Kids only ended up getting some of that $1,000. Most charities don’t get 100 percent of the car profits from auction sales.

I want to understand more about how this all works behind the scenes with other organizations, so I visit Make-A-Wish Greater Bay Area’s office in downtown Oakland. Elsa Lundy is the development manager there.

“We actually have a car donation partner, they’re called Wheels for Wishes, and they’re also a nonprofit, but they specialize in car donation,”  Lundy explains.

“They take care of everything — picking up the car and towing it, and bringing it to the auction house.”

As for the percentage her charity receives from these donations, Lundy says that  “about half” of the proceeds cover the towing costs — “and also marketing costs (because we do have to advertise our program), the auction house cost, etcetera.”

As for the other half of the proceeds from car donation — all that does go “directly to Make-a-Wish and to the kids that we serve,” she says.

Lundy says car-donation proceeds brings in $600,000 in annual revenue to their Bay Area office. That money goes toward helping local children who are critically ill.

And donors, like those in my mother’s situation, benefit during tax time.

“You get a pretty sizable tax deduction, at least $500,” Lundy explains. “Even if the car sells less for $500, you can deduct $500 from your taxes. If your car sells for more, you can deduct the sale amount.”

Investigating charities

Helping a good cause, reaping tax benefits — it all sounds great.

 

But not everyone has been happy with their experience.

This past spring, Minnesota Attorney General Lori Swanson accused Kars4Kids of misleading donors.

She issued a report alleging that over two years,  Kars4Kids raised $3 million in her state. But most of the money went to a Kars4Kids’ partner organization based in New Jersey that hosts a summer camp for Orthodox Jewish children.

Less than one percent went to kids in Minnesota.

Attorney General Swanson told CBS News, “I think it's important when people donate to a charity, that they have information in terms of where their money is going.”

San Francisco attorney Mark Anderson handles auto-fraud cases. He recommends potential donors investigate a charity before donating items or money.  

“One place you can go is the California Attorney General’s website,” says Anderson. “The California Attorney General actually regulates charities to make sure they’re not taking the money and running with it.”  

Donors can look up information on Kars4kids, Make a Wish, or anywhere else they might consider donating a car.

“Charities have to file a report on how much money they’re using internally as opposed to giving it away,” says Anderson.

Now, for the second time this year, my mother is ready to donate a car to Kars4Kids.

This time it’s her 1989 Volvo 240 DL.

 

After 28 years, this Volvo has come to the end of its road.  Duct tape holds up the side view mirror that someone knocked off. A layer of dust rests on top of the worn, Burgundy paint. There’s some discoloration on the hood. It’s not running anymore.

“It’s in pretty bad condition on the outside,” my mother says as we both stand outside looking at the car in her garage. “But the last time I took it in to have it serviced, which was less than a year ago, they said the motor and all of the inside was clean.”

I remember when my mom brought this car home, brand new. All of the kids noticed it when she picked me up from school.

Now the kids who live down the street will notice when the Volvo gets picked up and towed away.

 

This question came to KALW through Hey Area, a crowdsourced, collaborative reporting project. Got a question for Hey Area? Ask it below.