How to Donate a Vehicle to a Nonprofit

By Carolyn Williams

Overview

If your car isn't running or it is no longer useful to your family, it could be of significant use to a nonprofit. By donating a car, you provide a potential means of getting a person to work or helping the nonprofit receive funds from the sale of the car. You also receive a generous tax write-off, depending on the condition of your vehicle.

Step 1

Determine the value of your car based on its condition. Cars in good running order are more likely to be candidates for a program where the car is used to drive people to and from their places of employment. A good guide is the Kelley Blue Book. See the Resources section for a link.
Step 2

Know that the value of your tax write-off varies depending on how your car is used by the nonprofit. If your car will be driven in the work program, you can write off the full fair market value of the car. If the car is sold, you write off only the value the nonprofit receives as a result of the sale.

Step 3

Deliver the car to the nonprofit and sign the title over. Do not leave the title blank as it can cause issues with the tax benefit you are hoping to receive. If you leave the title blank and it is filled out by a dealer rather than the nonprofit, you may lose the tax deduction.
Step 4

Receive written acknowledgment of the donation of the car. The IRS requires a written acknowledgment that identifies how the car was used--for sale, scrap or for use in a program. This information determines the final tax benefit you can claim on your taxes.

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