Car Donations and charitable donations

The modern society, with its distinct wealth-based classes has always prided itself with a strong inclination to charity. From fundraising events to church donations, charity has become a way for helping others but also a way to get rid of some taxes. The tax benefit one gets from donating for charity is roughly proportional to the value of the donation of course. Lately, a new charity trend has formed, especially in the United States and Western/Central Europe, that of the car donation.

Auto gifts are for all intents and purposes give-aways of at no time in the future needed or vigorously utilized autos, to philanthropy associations, people, organizations or even foundations. In the Assembled States, the tax break from such auto gifts is among the most noteworthy you can get from gifts; consequently the act of giving endlessly your old auto when you buy a new one has become very popular. Usually, the charity organization you will donate your car too will evaluate it and set an estimative value for it, which will determine this tax reduction. For values that are under $500, the value of this reduction is set by the donors own estimate of the cars value. Deductions for donations over this amount are usually limited by the selling price of the vehicle. The vehicles are either sold in auctions or through direct marketing.

Car Donations and charitable donations

Although the car donation program is a solid one in theory, it has been speculated that it could soon become a tax shelter. Since this could not be proven so far, car donations have steadily grown to a number of almost 1 million per year. This means that almost 1 million tax payers have reduced their taxes with sums of up to $600-$700 million each year, only through this type of car donation.

From a charity organizations point of view, the car donation program is one of the best fields to work with. Actually, it has come to a point where such non-profit organizations actually rely on car donations to keep their charity events possible. Some of them have their own car lots for donated cars and process them directly, while others rely on ads, auto auction companies and so forth. What most charity organization will do is take the donated car, sell it through the auction company and then distribute the money to local charity organizations, or further donates the money to a charity that the donor of the car indicated.

It is important to understand that the charity organizations selling donated cars dont get a profit from it, they only take a small quota of the sum to cover up their expenses. A trustworthy car donation charity organization will bring other charities and institutions a lot of money each year, genuinely helping them out. This said, it is expected that the car donation phenomenon will constantly rise with each year, if the same tax reduction laws are applied further on. Given the fact that its one of the most solid and popular types of donations today, its very unlikely that these reductions will be hindered by government in any way.