Protect Yourself from Car Donation Scams

Charities rely almost exclusively on the generosity of others to carry out the work that they do. But before you make a donation, beware. Sad to say, but there are many individuals who will take advantage of your generosity for their own profit.

Before making a donation 20 charity, it is important for you to understand what type of charity to which you are donating. If you're interested in receiving a tax deduction, it is imperative that the charity is classified by the IRS as a 501(c)(3) organization. Without this classification, the charity is unable to extend you an IRS recognized deduction. To further protect yourself from an unscrupulous charity, ask for a copy of the letter they received from the IRS granting 501(c)(3) status. Also, request a copy of the incorporation documents and bylaws of the charity stating their policies regarding the acceptance of car donations. It could be that the charity promises you the possibility of a deduction, but it could be a promise on which they cannot deliver.

Another important consideration is to determine what percentage of donations are used to support the values of the charity opposed to the percentage used to support the charity.

Make Sure to Sign the Title

Unfortunately, many organizations that bill themselves as charities are really nothing more than an elaborate cover for car thieves. To protect yourself from these individuals, be careful to do the following:

  • Try to arrange delivery of the car to the charity yourself. If unable, make sure the representatives coming to pick up your car arrive in a branded tow truck.
  • Ask for and record the identification information of the representatives.
  • Despite what the charity representative may say, it is of vital importance that you sign the title to the car. With an open title, the charity can sell the car to a dealer or straight to salvage and pocket the cash.
  • Further, if you have not signed the title surrendering your ownership, any of the customary taxes, tolls or even potential traffic violations or accidents remain your responsibility as you remain the legal owner of the vehicle.
  • Be sure to remove all personal effects from the car. Remember things like toll tags, insurance information and the contents of the trunk and glove compartment. Check behind your visors, there's no telling what you may have placed there. Also, make sure that you remove any garage door openers. If a person is willing to steal a car in the name of a charity, imagine what they would do to the inside of your house.

Be Careful of Perks

Sometimes companies will support charities by providing tangible goods that can be used by the charity to incentivize new donors. While not strictly a scam, watch carefully. Even if the charity is legitimate and can offer you a tax deduction for your donation, realize that the cash value of your incentive will be subtracted from the amount of induction you can legally claim.

Check out this article on Bankrate for more information about how to protect yourself: Beware of Car Donation Scams