Should You Donate Your Car to Charity?


In today’s blog post, Julian discusses the best way to donate a car to a charitable organization.

If you have ever wondered about donating a used car to your favorite charity, there are a few things you need to know about the process. U.S. tax laws on charitable deductions can be a bit tricky, so let’s take a look at some expert advice on the topic from Charity Watch, an independent “charity watchdog” that has been around for more than 20 years.

• First thing’s first: Find out if the charity accepts cars as donations. Many do. Some don’t. Try to make things easy on the organization and deliver the vehicle to them, rather than make them pay to have it transported.

• Verify that the charity is legally allowed to receive tax-free donations in the form of vehicles. This step usually just involves a call or email to your state’s corporation commission.

• There are, essentially, three things a charitable organization does with cars that it receives. It can use the vehicle in its day-to-day operations, donate it to a person who needs it, or sell it. If they sell it, your tax donation will usually be valued at the sale price.

• Be prepared to do some paperwork, especially if the donation amount ends up being over $500. In that case, you will need to fill out a special IRS form for “non-cash charitable contributions.”

• As with all contributions you make to any charity, keep good records. In this case, take several photos of the car, copy all paperwork the charity gives you, and note any improvements you made to the vehicle (like putting new tires on it, or having it painted) in order to get it ready to donate.

• In most cases where the vehicle is worth more than $5,000, you will need to have an appraiser verify its worth. When the value is between $500 and $5,000, you can make an educated estimate of its value by using the Kelley Blue Book or a similar industry publication.

• Keep in mind that if the IRS challenges your valuation, you will be the one who has to come up with documentation about the vehicle’s worth, so maintaining accurate and complete records is vitally important.

• Finally, you might want to consider an organization that acts as a middleman in such transactions. One California-based entity, Cars2Charities, takes care of all the paperwork and red tape, so donors need do nothing but choose their favorite charity and sign a donation receipt. Cars2Charities fixes up the donated vehicles, sells them, and then hands the cash to your designated charity.

Donating a car to charity is a good way to help your community’s philanthropic organizations. If you own a used car that you seldom use, why not give it to your favorite charity?

Be good to each other,

Julian Omidi

Julian Omidi, along with his brother Michael and mother Cindy, are activists and philanthropists who promote the health and overall well-being of people and animals.