About Vehicle Donations to Non-Profits

By Nicole Harms

  • Overview

    About Vehicle Donations to Non-Profits
    If you have an old junker sitting around in your yard taking up space, you can benefit from the worthless vehicle by donating it to a non-profit organization. Donating a vehicle to charity is simple to do, and you can receive a substantial tax deduction when you are done, all while helping a great charitable organization.
  • Function

    For most non-profit vehicle donation programs, you need to have a clear title to the vehicle. In order to donate, you contact the charity of your choice and arrange a pick up time. Some charities will pick up the vehicle for you, while others ask that you bring drivable vehicles to a specific location. Because they can auction the vehicles off for parts, most charities will accept vehicles that do not run, provided there is enough value left in the parts to make the pickup worthwhile.
  • Benefits

    Donating your car to charity is a mutually beneficial option when you have a car that you need to get rid of. The charity you choose to donate the vehicle to will be able to sell it or sell its parts and get money they can use for their community projects. In this way you are doing your part to help the community. You also will benefit financially from a large tax deduction if you itemize on your tax return.

  • Significance

    Receiving the tax deduction for your vehicle donation is not difficult if you work with a reputable charity. They will provide you with the necessary paperwork, such as IRS tax form 1098-C, which states the vehicle's sale price. If the vehicle is worth more than $500, you will be able to deduct the entire amount the charity receives for it using this form, and if it is worth less than $500, you will be able to deduct its approximate value. For this smaller deduction, you do not need anything other than the receipt that the charity provides at the time of pickup.
  • Identification

    Choosing a non-profit organization to donate your vehicle to is the first step in this process. There are many third parties that will help you arrange the donation. However, the best way to ensure that all of the proceeds of your donation go to your chosen charity is to donate directly to that charity, if that option is available. For instance, the Salvation Army, one of the best-known charities in the country, actively seeks vehicle donations.
  • Considerations

    Donating your vehicle to charity makes sense if you do not need it and it is simply taking up space in your yard, but this decision is not as easy if you are looking to purchase a replacement vehicle. Often you can use your existing vehicle as a trade-in, lowering the price of your new purchase. Before you decide, call your favorite charity and find out what the deductions have been for similar vehicles. You may find that you will benefit more from donating and receiving the tax deduction than from the amount offered to you for a trade-in at the car dealership.
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