Scam alert: You’ve heard the catchy jingle on radio and TV hundreds of times.
But Kars4Kids is not what it seems.
The car donation charity has been accused repeatedly of misleading donors and misuse of funds, and has settled numerous lawsuits for misleading donors and misusing funds.
If you are considering donating Old Breakdown to a charity before the end of 2019 to get a tax donation, be sure research that charity thoroughly before you donate.
Do not make up your mind based on an infectuous radio or TV jingle you hear over and over and over.
Scam Alert:
Kars4Kids Gets Low Ratings from Charity Watchdogs
The two top charity watchdog and rating groups – Charity Navigator and Charity Watch both give Kars4Kids low-to-failing ratings, for “disguising the purpose” of donations, and because of the costly non-stop 1-877-Kars4Kids commercials with the appeal to “donate your car today”.
Non-Profit Quarterly, a trade publication which writes about charity news, describes Kars4Kids as a “a self-dealing mess”
Simply, the constant advertising eats into the amount of donation money left over to actually run the programs the advertising is promoting for any charity, and Kars4Kids appears to be more guilty than most.
The Minnesota Attorney-General has accused 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 another non-profit with a narrow religious and geographical focus in another state, thousands of miles away from Minnesota.
Scam Alert:
Where Kars4Kids Money Really Goes
In other words – Kars4Kids used only 1% of donations raised in Minnesota for local programs for Minnesota kids.
And the ratio is likely to be similar in the many other states where it advertises for donations.
While Kars4Kids advertises and accepts vehicle donations in all 50 states, it’s sister non-profit, Oorah receives 90% of operating funds.
Oorah supports only camps for Orthodox Jewish children, and only in New York and New Jersey.
If you ive in Minnesota or Oregon and want to donate your car to support summer camps for Orthodox Jewish children in New Jersey, that is your right. But that is not the point.
Where the money goes is not mentioned in any 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 has shared 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.
Scam Alert:
Kars4Kids Failed Real Estate Ventures
The Minnesota report also says that Oorah lost close to $10 million in failed real estate investments, by a cousin of a Kars4Kids/Oorah executive.
Since Kars4Kids is also now soliciting donations of real estate, you would be smart to think twice about donating to a group with $10 million worth of failed real estate investments.
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.
Pros and Cons of Donating a Vehicle to Charity
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 donate 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.
This article was first posted in 2017 and updated for the 2019 tax season and again for the 2019 end-of-year charity donation season.
Copyright (C) Evelyn Kanter
ecoXplorer Evelyn Kanter is a journalist with 20+ years of experience as a newspaper and magazine writer, radio & TV news producer & reporter, and guidebook and smartphone app author – all focusing on travel, automotive, the environment and your rights as a consumer.
Contact me at evelyn@ecoxplorer.com.
Also follow my NYC website, www.nyconthecheap.com.
I am a used car dealer in Massachusetts and was told a few years ago by a large salvage yard in Waltham, Ma that dealt with this charity as the collector and disposal/sales agent for the actual vehicles, that they suspected this was a scam. They formed this opinion based on all interactions with the charity… If you call them about details of the free vacation or where the car money goes after they sell the cars, they just give you double talk. You don’t need a piece of paper from these clowns to claim a charitable donation, it’s merely backup if you were ever to be audited. I am quite sick of the kars4kids advertisement on Iheart radio, the former ClearChannel outfit has been under bankruptcy for a couple years and this jingle seems to be a time filler for unsold time when streaming online.
As long as the funds are being used for charitible purposes and not just to pay the CEO a six figure salary I do not see what the problem is? So the money goes to a particular religious group. I am Jewish and I also give to Christian groups. If I give a dollar I want at the very least .75 cents going to charity. It costs a lot to advertise but without it they would raise next to nothing. Charites that contact me every 60 days with a slick mailer I will not give to. They are definately spending more on advertising and office overhead than they are applying to the charity.
Kudos to you for donating both to Jewish and Christian groups. But that is not the point of this article.
The point is not all charities are what they seem, and this one is at the top of the list, hiding it’s true purpose.
Terrific if you want to donate to a charity that sends super-religious children of a particular religion to summer camp. Not terrific if that information is not included in the pitch for your money. Or that the bulk of donation funds are transferred to relatives of the charity which gets your money.
You say you donate to charities that “at the very least” spend 75 cents out of every dollar to the charity’s programs. The point of this article is to show that this charity spends less than 30 cents, the rest going to advertising.
The point of my article is to research a charity before you sent if your hard-earned money. If you still like what you see, by all means, support the charity. If not – find another charity.