Donating your vehicle to a charity is one of the best ways to help underprivileged people in your community. This is because there are a number of ways that a charity can use a donated vehicle. For example, if your vehicle is not salvageable, the charity can still get some capital by selling the automobile for parts. For many charities, a large percentage of their annual budget depends on a steady influx of donated cars.
In most cases, donating your car to a charity is a fairly straightforward process. Before you donate your car, however, you need to make sure that the charity is an eligible entity. According to bankrate.com, you should investigate the legitimacy of the charity by conducting some thorough research. For example, you can contact the IRS to request the charity’s nonprofit tax return, which describes all of the organization’s pertinent information.
To Keep a Charity in Business
Contrary to popular belief, the average charity is run like a business. Depending on the charity, the organization can have accountants, managers, clerks and a chief operating officer. This is because one of the main goals of a charity is distributing capital to areas in need. To accomplish this goal, charities need employees, infrastructure and transportation. However, a charity must pay for its operations, further its mandate and meet the needs of its stakeholders from donations. As a result, donating your car to your favorite charity can directly keep the organization in operation. In most cases, a percentage of the proceeds from your donated vehicle is allocated to funding the charity’s operations, which can also include advertising, fundraising and skilled services.
Help Families in Need
Not all donated vehicles are immediately sold by a charity. If your vehicle is still in good working condition, your charity may give the car to a family who needs personal transportation to improve their living situation. For example, a car can greatly improve the transportation needs of a single mother who has two children in school. In addition, some charities may keep a functioning automobile to help with their transportation needs, such as delivering meals to the needy, hauling goods to impoverished areas and providing a means of reliable transport to workers who don’t have a driver’s license.
Reduce Your Tax Burden
Claiming your donated vehicle as a charitable contribution entitles you to significant tax savings. However, the exact amount that you can claim depends on the vehicle’s fair market value. In addition, the IRS also has specific rules regarding vehicle donation. For example, if your car donation claim is over 5,000 dollars, you need to submit a written acknowledgment from the charity with your tax returns. Some examples of the information that must be on the statement include the automobile’s vehicle identification number, the vehicle’s sale price and the date the vehicle was sold. Many charities help donors to correctly claim a car donation on their taxes.