Friday, January 22, 2016

Vehicle Donations: How Are Charity Ratings Determined?

Charities are usually very grateful for donations, so they try to make it easy for you, even for large donations, such as vehicle donations.  They will usually take cars in any condition, and arrange to have the vehicle towed away at your convenience.  They will provide you with proof of the donation, and give you information about claiming a deduction on your taxes for your car donations.  Often, the only difficult part about it is finding the best charity to donate a car to.  There are some major charities that receive millions of dollars in funding, but that comparatively spend very little on programs that actually make a difference.  Your car donations will be wasted if you give to one of those charities, so do some research before you donate.
Vehicle Donations: How Are Charity Ratings Determined?

How are car donation charities rated?

There are different charity watchdog groups that rate non-profit organizations and give donors information on the organization’s fundraising and expenses.  Charity financial reporting can be very complex, and these watchdog groups try to provide a bottom line so that donors can make an informed decision.  They usually audit financial statements, tax forms, state filings, and other documents, then assign the charity a rating.  One of the most important pieces of information when looking for the best charity to donate a car to is the percent of expenses that are spent on programs.  Generally, at least 75% of the expenses should go towards programs.  The rest of the expenses are likely overhead costs such as management and fundraising.  Another indication of the quality of the charity is how much money they spend to raise $100.  This can help to judge fundraising efficiency.  To receive a favorable rating from charity watchdog groups, a charity usually has to spend $25 or less to raise $100; and use at least 75% of their expenses for their programs.

While there are some charities that you should probably avoid, most American charities are actually very responsible and efficient.  When you have a car to donate, just do your homework first and you should be able to find the best charity to donate a car to. You will likely be able to find one that is both efficient and that supports a cause that is important to you.

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