Scam Alert: Kars4Kids Car Donation Charity

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.

SEE ALSO

My article on pros and cons of donating your car to charity, on SheBuysCars.com

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.