Donated Car Proceeds

* Re “Group Puts Charities in Driver’s Seat,” July 24.

This article mentioned that charities receive only 15% to 33% of the proceeds from selling donated cars. This is consistent with the Registry of Charitable Trusts, which estimates that charities receive only 20% of the proceeds.

Besides not benefiting charity very much, car donation programs put donors at risk in terms of the itemized deductions they list when they donate a car. The radio ads for the various car donation organizations frequently mention Blue Book value. Because the cars are usually marketed through brokers and dealers, donors should be careful to use only the wholesale Blue Book values and not the higher retail values.

Actually, if the Internal Revenue Service audits a donor, the deduction will be limited to the sales price of the specific car that was donated, which might be quite low since they are often priced for a very quick sale. Donors should demand written statements that show the actual sales prices so that they can substantiate their itemized deductions.

In the end, charities would be better served if donors would sell their old cars themselves and then donate the cash (after deducting the costs of the sales). With a receipt for a cash donation, a donor facing an IRS audit would also be better served this way.

DAVID E. ROSS

Oak Park