Car Donations - What Percentage of Proceeds Go to Charity?

Car Donations - What Percentage of Proceeds Go to Charity?

Donate Your Car NJ

The short answer is, it depends. The car donation industry is larger and more competitive than you may realize with some established charities receiving millions of dollars of revenue from charity car auctions every year.

Charities & The Second-Hand Car Business

Charities relying on funds from car donations are directly aligned with the used and second hand car business.  As a business sector it doesn’t have the cleanest track record or reputation and therefore, we strongly recommend you ask as many questions as possible before you part with your vehicle. Of course, if you are not concerned about claiming a tax deduction, then the most important decision is your preferred choice of charity or beneficial cause.

Look Out For Profit-Making Organizations

At the very least, you should be concerned about how much revenue your chosen charity will receive once your car is sold.  You may not realize it, but many charities – particularly the smaller, local ones – are not directly responsible for running their own vehicle donation programs. Many have chosen to take advantage of legislation set out in IRS publication 4302 (“A Charity’s Guide to Vehicle Donations“) where a ‘for-profit’ agent is hired to operate the program under the charity’s banner.  Ultimately, the charity is responsible and accountable for the agent’s activities.

As a car donor, however, you will not know exactly how much or what percentage of the final sale will be received by your charity.  What is certain is that by donating your car to a charity that does operate its own donation scheme, most of the revenue from your car’s sale will end up in its coffers.

My advice, therefore, is to ask as many questions as you feel are necessary and do not be afraid to turn your attentions elsewhere if you do not get the answers you require.

At Cash for Junk Autos NJ we can offer a charitable tax deduction as affiliates of the American Children's Society, if you choose to donate instead of sell your vehicle for cash. Give us a call for more information at 973-699-6005!