How can non-profits accept car donations?

September 26, 2014 4:14 PM

I work for a non-profit, and a donor asked about donating a used car to us. How does that work?

We don't have a car donation program, so my supervisor asked me to look into how the car donation process would work. I know that there's places that accept cars and give a portion of the profits to the non-profits, but it sounds like some of these are middle men who only give a tiny percentage back to the intended recipient.

What sort of paperwork is involved? IRS? Vehicle title? Is it worth it for us to take the donation?

Thanks for helping me do my job, Hivemind.

posted by myntu to Work & Money (5 answers total)

They either auction the car or they sell it to a scrapyard. You have to give them the title when you donate, and you have to get a receipt of donation that you use when you file your income taxes. (Only works if you itemize your deductions, and *don't* take the standard exemption.) (I am not a tax advisor, and I donated a car this way ~12 years ago.)
posted by Wild_Eep at 4:24 PM on September 26, 2014

I've never donated a car, but I've bought and sold plenty. It really is fairly simple IF the title is free and clear and the seller actually has the pink slip in hand, which I believe is what you'll want to do in every case. Then it's just a matter of accepting the title and the keys and issuing an itemized receipt for the agreed-upon value of the car (save a copy for yourself). The person making the donation handles their own IRS issues, just as they would any other donation (e.g. they can itemize it and provide the IRS with the receipt you gave them).

You're now the owner of a car, which must be registered by the DMV within a certain grace period (varies by state); you can usually register it as "non-driveable" for the smallest possible fee, if you're just going to sell it or store it or whatever.

But what will you be doing with it? Re-selling it? That sounds like a pain.

Usually, the charities that accept car donations have relationships with low-end dealers that will just take any used car, and/or a relationship with wrecking yards that will pay for the scrap or parts.
posted by Cool Papa Bell at 4:30 PM on September 26, 2014

My family donated a van to a nonprofit a bunch of years back. While the nonprofit had no use for the van itself, a gentleman who did a lot of handyman type work for the nonprofit did need a van. They traded the van to him for some work he did.

I'm sure there needs to be a lot of paperwork done on all sides of that and I can't even begin to tell you what, but my point is that there may be other people or organizations that your organization partners with that can put that vehicle to use.
posted by phunniemee at 4:43 PM on September 26, 2014

If your program doesn't already have a relationship with a car donation program, then it sounds like it might be easier for the donor to just sell the car to CarMax or a similar no-hassle option and then just give you the cash.
posted by dcjd at 4:47 PM on September 26, 2014 [1 favorite]

I think smaller non-profits typically contract with a company like this one. The company manages the car itself, and the non-profit gets a portion of the sale. I looked into this once, and recall having found a couple companies that offer this service.
posted by nerdcore at 5:55 PM on September 26, 2014 [1 favorite]