Car Donation Charity Program

"How can we get a car donation program going to raise money?"

This is a question we have often been asked by all sorts of people. Most of these types of inquiries are very sincere; a few people however, seem to be motivated by a desire to make a lot of fast bucks for themselves, personally. To those who might fall into this latter category, do not ask us for assistance.

Car Donation Program

If you are a charity volunteer or employee, then by all means consider instituting a vehicle donation or car donation program for your group. You first however, must meet some very exacting requirements and none of them are cheap or easy to come by.

The following sequence of actions, once completed, will stand you in good stead regarding the complex maze of state and federal laws, but will not guarantee your success. Most car donation programs go out of business due to the extremely high cost of advertising, towing vehicles and selling costs.

1. Employ the best law firm you can afford, that specializes in nonprofit law.

2. Have the above law firm make, to the IRS, application for your charity's 501(c)(3) status.

3. Part of the above application must contain a well thought out and written "Mission Statement" that proves your group intends to contribute to the public's welfare.

4. In 3 to 18 months you should find out if your charity has been granted exemption under section 501(c)(3) of the Internal Revenue's Tax Code.

5. If your group is denied exemption, find a new tax firm, specializing in nonprofit law, and submit a new application, paying special attention to a better thought-out and written "Mission Statement". Remember, good Mission Statements clearly state the organization's purpose, intentions and how those relate to the public good.

6. If your group is denied 501(c)(3) status, a second time, your chances of approval with a third submission are not good. If you are granted status you will be ready to proceed, and a lengthy, costly procedure it is.

7. Now search for a law firm that has experience in registering 501(c)(3)'s, as you must next register your group with the Secretary of State or Attorney General's office in the state you wish to fund raise. This registration requires an indemnification fee that could range from $25,000 to a quarter of a million dollars, depending on the state. This procedure must be followed in every state your group wishes to fund raise. If your group plans to put up a web site, for your donation program, you'll have to register in all fifty states and some counties.

8. At this juncture you must be very patient, if you plan to use the net, because technically, all 50 of your state registrations have to be approved and accepted by each state before you put up your web site. This process can be very frustrating, if however, you've used an excellent law firm and lady luck is on your side, this process might be completed inside of 6-9 months.

9. Now you must shift your group from a passive mode to a very active one and you must all be smart about it. You'll need to locate 50-100 auto auction outlets that will sell your donated vehicles at the highest possible prices and charge you a fair percentage.

10. Next you must do the same, as above, with vehicle towing companies. This is a much easier step as the auction houses you have contracted with, will be able to advise you on who does the best job at the best prices. Prices are important, because often the towing fee will exceed the auction selling price of a towed vehicle.

11. Once all of the above steps have been completed you have to take the most vital step of all. Actually this step is more like a leap, a leap of faith, especially if you have no experience in the area; because the chasm below you here is wide and deep and full of insatiable sharks, all hungry for your financial wherewithal.
    
    —It is the field of advertising of which we are referring, and it can bleed you to death, quickly or slowing, depending on the effectiveness of your advertising program.
    
    —We know of no commercial web sites on the net, save one, that can be viable without supporting advertising from newspapers, magazines, radio or the net itself.
    
    —If you are a genius with advertising, a $25,000 advertising budget might show a small profit, before your budget is depleted. It'll take a $50,000 budget for the girl or guy really smart about advertising expenditures, but a $100,000.00 budget is the safest, if you consider a roll of the dice for a $100,000 safe.
    
    —Advertising agencies are an option, but in our experience are no better than buying option futures on a commodity exchange, all of whom should be licensed by gaming boards.

12. At the end of your charity's financial year it is required by federal and state laws to produce and send a tax return, called Form 990, to the IRS and each state.

13. Let us all hope your charity did indeed earn some money, because you'll need $10,000.00 to $25,000 to pay a certified public accountancy firm to do your certified year's end audit. If a certified Form 990 is not sent to all the proper federal and state authorities the principals and officers of your nonprofit charity may be found guilty of civil and/or criminal offenses.

14. And, of course, you'll need a staff of well trained and responsible people to work your car donation program 7 days a week, 12 hours a day... all with a smile. We trust we have answered your question.

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