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Car Donations Down at Many U.S. Charities

(Aug. 8, 2005) The number of cars donated to charity has dramatically dipped since the beginning of 2005, according to an article in The Chronicle of Philanthropy, and many of the charities experiencing downturns blame new laws passed by Congress.

The trend is especially disturbing since Congress is currently considering reforms of other types of contributions to charity (including real estate, art, intellectual property, food, books and household items) as well.

The American Cancer Society in Atlanta, Charity Motors in Detroit and Volunteers of America in Alexandria, Va., have all experienced approximately 40 percent decreases in car donations since the new law came into effect, according to the article.

However, not all charities interviewed for the article experienced declines in car donations, and some expected to see such contributions increase over time. Many blame the significant downturn in 2005 on the large number of contributors who rushed to donate their vehicles in late 2004 before the law changed.

Sen. Chuck Grassley (R-Iowa), chair of the U.S. Senate Finance Committee and the key supporter of the vehicle donations reforms, believes that the reforms are having the intended impact. 'The alternative to our reforms is to advocate tax fraud,' he says in the article. 'We're saying people shouldn't be able to claim tax deductions they haven't earned.'

The article, 'Driven Off Course,' was published in the Aug. 4 edition of The Chronicle of Philanthropy. Online subscribers can view the article on the Chronicle website (user name and password required).

Avoiding Similar Declines for Other Types of Giving

With mounting evidence that many car donation programs have been badly hurt by congressional reform, charities need to actively lobby their members of Congress to ensure that additional types of giving are not affected in the same manner.

'The bottom line is that almost all charities run legitimate programs in an ethical and effective manner,' says AFP President and CEO Paulette Maehara, CFRE, CAE. 'Certainly some minor reforms are needed in a few areas, but the majority of the proposals on the table now simply throw the baby out with the bath water. They're an overreaction to a few well-known controversies that get repeated over and over, and they will only hurt legitimate organizations.'

Maehara points to a study that shows that many charities are already putting in place additional accountability standards and mechanisms, even when not required to do so by law. 'Most charities are already well ahead of the game, and many are complying with Sarbanes-Oxley requirements even though the law mostly affects for-profit entities,' she notes.

All AFP members are urged to contact their Congressional representatives and encourage them to vote against additional charitable 'reforms' that sound good but won't do anything to encourage accountability in the sector. It is especially critical to have members of nonprofit board of directors, major donors and key volunteers to write in as well.

Maehara acknowledges that it's difficult to lobby against proposals that haven't been introduced in any sort of official form. 'One of the challenges we have is that we don't know for sure yet what will be in the Senate Finance Committee legislation,' she says. 'We have draft concepts, as well as bits and pieces of information we're gathering from various offices. That's the reason our messages currently are so general, but we have to do this now and set the stage for when the official legislation is introduced.'

Regular mail still takes a long time to reach congressional offices because of the scanning and examination done by the U.S. Postal Service, and legislators receive too many emails to respond to all of them. AFP members and chapters are urged to fax letters to offices or meet with legislators and their staff in person, especially while they are in their home offices during the congressional recess.

For more information on lobbying activities for chapters and members regarding the current congressional proposals on charities, click here.

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