Scam alert: You’ve heard the catchy jingle on radio and TV hundreds of times. But Kars4Kids may not be what it seems. The car donation charity is being accused of misleading donors, along with misuse of funds.
Charity watchdog and rating groups like Charity Navigator and Charity Watch give Kars4Kids low-to-failing ratings, in part because of the costly non-stop 1-877-Kars4Kids commercials with the appeal to “donate your car today”. Simply, such constant advertising eats into the amount of donation money left over to actually run the programs the advertising is promoting.
Now, the Minnesota Attorney-General is accusing Kars4Kids of spending just $12,000 on programs for Minnesota kids after raising some $3 million in the state, and neglecting to tell donors it turns over 90% of money left over after advertising and other expenses to one single partner non-profit with a narrow religious and geographical focus.
SEE ALSO My article on pros and cons of donating your car to charity, on SheBuysCars.com
While Kars4Kids advertises and accepts vehicle donations in all 50 states, it’s sister non-profit, Oorah, supports only camps for Orthodox Jewish children, only in New York and New Jersey. That’s not mentioned in any of Kars4Kids ads.
Also not mentioned in any Kars4Kids commercials is that Oorah actually shares an office in New Jersey with Kars4Kids, and that some employees work for both non-profits, according to the Minnesota A-G.
That doesn’t sound kosher, which is why the Minnesota A-G is sharing its 300-page report with Attorneys-General in other states and with the IRS, which could revoke Kars4Kids non-profit status if it determines there’s outright fraud.
In 2009, Kars4Kids settled with Pennsylvania and Oregon over similar claims of misleading donors, and of violating its tax exempt status by offering ‘free vacations’ to potential donors.
The Minnesota report says Kars4Kids raised $88 million nationally between 2012 and 2014 from scrapping and selling 160,000 vehicles, and passed nearly half of that, or $40 million, across the office to Oorah.
The Minnesota report also says that Oorah lost close to $10 million in failed real estate investments, by a relative of a Kars4Kids/Oorah executive.
It’s certainly okay to donate to a charity that runs summer camps for youths of a particular religion in a particular state – so long as that’s where you want your donation money to go.
The issue here is transparency – or lack of it. If you live in Minnesota, you should know that just 1% of your donations will be used locally. Wherever you live, you should know how your hard earned money is being used.
Donating a vehicle that’s not working, and not worth the cost to repair, is a cheap way of having somebody else pay to tow it away, to be sold for parts and scrap. But you wind up paying, anyway, since you won’t get you anything close to the tax benefits you might be promised by the donation charity.
You are better off selling Old Breakdown yourself for parts and scrap, and donating the profits directly to a legitimate children’s charity, such as the Make-A-Wish Foundation, Children’s Miracle Network or the Special Olympics.
If the vehicle is in good working order, you’ll do better selling it yourself, or donating it to a legitimate charity like Salvation Army or Volunteers of America, which will give your vehicle to a poor person who needs transportation to get a job.
Whether you are donating a vehicle, household furnishings or money, always check the charity’s rating first with one of the charity rating services. There are plenty of A-rated charities which are transparent about how they use donation money, and don’t spend half of what they raise on non-stop radio and TV commercials.