You've got an old car you'd like to unload, and the deal sounds pretty good: Donate it to an agency that handles all the paperwork, get a tax deduction and support a good cause.
It all made sense to Richard Olivier of Chatsworth, whose Canoga Park chapter of the Knights of Columbus raises money every year for a youth scholarship. When Olivier's father became too old to safely drive, Olivier suggested he donate his 1997 Oldsmobile Eighty Eight to Cars 4 Causes in Ventura, which would then sell the car and donate a part of the proceeds to the Knights of Columbus.
FOR THE RECORD: A previous version of this column misspelled Kars4Kids as Karz4Kidz.
Cars 4 Causes — one of dozens of such organizations in the country — claims to have taken in more than 200,000 vehicles nationally in 17 years, with $8.6 million worth of donations in the year ending in June of 2012. It calls itself "the charity that gives to charities," the nation's "most trusted" and "America's 1st vehicle donation charity."
But would it measure up when Richard Olivier's father, Roger, handed over the keys of his Oldsmobile?
Roger Olivier donated the car last summer. In early July, he got a thank-you letter from Cars 4 Causes, along with a tax document indicating that his car had been sold for $700.
Summer came and went, and so did the fall season, but Roger's son Richard got no check from Cars 4 Causes. Then, in early December, a letter addressed to the Knights of Columbus finally arrived in Canoga Park.
"The Cars 4 Causes Vehicle Donation Program is pleased to present you with the enclosed check," said the letter.
The check was for $25.
Olivier was expecting something in the neighborhood of $500. He double-checked the Cars 4 Causes website and saw the claim that "4.6% of our total expenses are spent on management and general expenses." It also says on the website that "70% of the net sale amount from your donation will be shared with the charity of your choice and the rest will go to support Cars 4 Causes youth-oriented charity programs."
Richard Olivier said he called Cars 4 Causes to demand an explanation as to how a $700 sale got whittled down to a $25 donation, and he was told the agency would investigate and respond. When it didn't initially respond, and failed to return several of his phone calls, Olivier wrote to The Times.
"It is my feeling that they never anticipated someone being able to see both ends of the transaction," he said. And that made him wonder: If they're doing this to the Knights of Columbus, maybe they're doing it to other organizations as well.
Last Monday I drove to Cars 4 Causes — a storefront operation just off the Ventura Highway — with all of Richard Olivier's paperwork. I asked to speak to someone about his case and was told the staff was busy, but someone would look into the matter and get back to me.
Over the next two days, I researched a number of complaints and legal claims against Cars 4 Causes. A class-action suit, filed last year, is pending. It accuses the nonprofit of fraud and misrepresentation and states that Cars 4 Causes "charged steep hidden fees and costs, such as processing fees, title fees, media fees and postage fees, and that such fees are taken before any proceeds are actually distributed to any charity."
Attorney Gilbert Perez, who filed the lawsuit, told me he searched the Cars 4 Causes website for a breakdown of such costs. "But it doesn't exist," he said.
In 2003, the California Department of Motor Vehicles and attorney general's office sued Cars 4 Causes, accusing it of fraudulent and deceptive business practices. Cars 4 Causes prevailed initially, but an appellate ruling in 2006 concluded that "the advertising of free towing is deceptive. The towing is free to the donor, but not to the charities."
In the booming business of vehicle donations, Cars 4 Causes is not alone in drawing scrutiny. Kars4Kids, whose "1-877" jingle has the kick of a recurring migraine, was sued by Oregon and Pennsylvania for, among other things, being vague about which kids and programs benefit from car donations.
Kars4Kids is affiliated with Oorah, which promotes an Orthodox Jewish lifestyle, and a majority of the proceeds from car donations fund a summer camp and other programs. A spokesperson told me the nonprofit made more information available in settling the legal claims against it.
"It might be a lot better to sell a car yourself and donate the proceeds to charity," said Daniel Borochoff of Charitywatch. But if you don't want the hassle and prefer using a car donation agency, he said, you should demand to know what all the processing and overhead costs are and how much of the sale price will be forwarded to the chosen charity.
Two days after my visit to Cars 4 Causes, I got a call from Anthony Glenn, a founding member who has just taken over as president and CEO. I asked him how a $700 sale resulted in a $25 donation.
The car was sold by an auction house that took 20%, he said, or $140. That left $560, from which $388 was subtracted for fees like towing and title processing, and for the cost of doing business: employee salaries, insurance, rent, etc.
That left $172, but Glenn said Cars 4 Causes actually lost money on Mr. Olivier's car after subtracting an additional $211 in advertising fees. The advertising fee is based on total monthly advertising costs divided by the number of cars it sells in a month, according to Glenn.
"We, as a policy, will give a minimum check of $25 to a charity because it feels like the right thing to do," said Glenn. Ah, so that's why, on social media, I had seen complaints from others who ended up with exactly $25.
The right thing to do, it seems to me, would be to provide donors a clear picture of how it all works, with full upfront disclosure of costs and fees. When I directed Glenn to his website claim that "4.6% of our total expenses are spent on management and general expenses," he could not explain what that meant, which is a little surprising, coming from a founding member with 17 years at Cars 4 Causes.
It's misleading, I said. To say the least.
"I don't disagree. I think it should be removed immediately," Glenn said.
"We've got some problems and we're identifying them now and working hard to fix them," he said.
He told me he hoped more information on true costs would be posted on the website within a week, and that the nonprofit had to do a better job of returning calls from unhappy customers. He also said Cars 4 Causes has to decide whether to discontinue accepting vehicles that sell for $700 or thereabouts, because the margins are too small.
Glenn said "nobody is living the high life" at Cars 4 Causes, and recent layoffs are part of an ongoing effort to trim costs in a competitive business and forward more money to charities. He also claimed the nonprofit has far more champions than detractors.
One of the former, Richard Friedlander of the Ventura social service agency Kids & Families Together, told me Cars 4 Causes has been a consistent supporter over many years. He said Cars 4 Causes has donated money and a vehicle as well as paying for a new roof on one of its buildings.
Be that as it may, Richard Olivier still isn't happy, even after Glenn called him to explain why the $700 sale price for his father's car resulted in a meager $25 donation to the Knights of Columbus.
"I told him I find that hard to believe," said Olivier, who will now be looking for other ways to raise money for the annual Knights of Columbus youth scholarship.