How to Donate a Car to a Veteran's Group

Have a past-its-prime car you are considering donating to charity, but not sure how to go about it? Would you like to make the donation benefit a veterans' group, but have no idea which one? Not sure about using the donation for a tax deduction?
Donating your car to charity---and making sure a veterans' group receives the benefit---may be simple or complex, depending on the choices you make. Deciding whom to designate as the recipient of your generosity---and making sure you choose wisely, should be a significant part of the process.
And last of all, do not let the intimidating list of paperwork you may need throw you for a loop. Most charities or third-party charity assistance firms will walk you through the process of donating your car, making it as simple a process as possible.

Things You'll Need

• A vehicle you are willing to donate (need not be in working order) The title to the vehicle (you must be the owner and not have a lien with a bank for ownership of the car) A notary to notarize the title and the Limited Power of Attorney form (some charities will take care of this for you) The keys to the car A signed odometer statement (some charities will take care of this for you) Vehicle donation form (provided by those charities that require it)

Instructions

Choosing a Veterans Charity to Receive Your Donation

1. Choosing a charity will involve some research on your part. Before targeting a veterans' charity to receive your donation, check them out to make sure the charity is highly rated and effective. A good place to do this is through websites like CharityNavigator.org, CharityWatch.org, or the Better Business Bureau site for Charities and Donors (see Resources).
   You should research the veterans' charity before donating because otherwise your valuable donation might go primarily to run the organization and might never make its way to your intended group---veterans. Unfortunately, several veterans' charities have been investigated for providing a low percentage of their operating costs to helping veterans. According to the BBB, no more than 35% of contributions to any charity should be spent on overheads and fundraising.
   A quick search turns up many highly rated veterans and military aid groups, although this list is by no means conclusive. (Please do your own research for an updated list.)

   Highly Rated Veterans' Charities:
   Admiral Nimitz Foundation, [phone], [e-mail]
   Air Force Aid Society, [phone], [e-mail]
   Air Force Enlisted Village, [phone], [e-mail]
   Armed Services YMCA of the USA, [phone], [e-mail]
   Army Emergency Relief, [phone], [e-mail]
   Disabled American Veterans Charitable Service Trust, [phone], [e-mail]
   Fisher House Foundation (FHF), [phone], [e-mail]
   Homes for Our Troops, (866) 7 TROOPS, [e-mail]
   Intrepid Fallen Heroes Fund, (800) 340-HERO , [e-mail]
   Marine Corps Scholarship Foundation, [phone], [e-mail]
   National Military Family Association, [phone], [e-mail]
   Navy-Marine Corps Relief Society, [phone], [e-mail]
   Operation Homefront, [phone], [e-mail]
   Special Operations Warrior Foundation, [phone], [e-mail]
   Tragedy Assistance Program for Survivors, [phone], [e-mail]
   USO, [phone], [e-mail]
   Veterans of Foreign Wars Foundation, [phone], [e-mail]

2. After you have narrowed down your target group of veterans' charities, you will then need to sort out which ones will accept a vehicle donation. The temptation at this point might be to do a search with a search engine to find a veterans' charity that accepts vehicles. However, this may bring results of charities with poor charity effectiveness scores.
   For instance, Disabled American Veterans (call [phone], or email [e-mail]) is a highly rated veterans and military assistance charity that currently accepts vehicle donations directly.

3. Once you have a shortened list of veteran-targeted charities that are highly rated and accept car donations, you will need to decide which charity will receive your donation. Call each charity and find out how interested they are in your donation and whether they can help you with making arrangements or whether you will have to drive the car or have it towed to a given site.

4. After you have decided which veterans charity to use, commit to them so that they can work with you on logistics. You may have to do extra steps, such as getting a Power of Attorney form notarized and getting the title to your car notarized. Each charity has different steps and requirements, which they will discuss with you. For example, some may ask you to drive the car to a pick-up point and leave the keys and title with someone.

5. File your car donation receipt with the current year's tax receipts so that you will have it handy for filing taxes the following year. IRS legislation requires you to report only the amount for which the vehicle sold as your tax deductible donation. If your car brings in less than $500 (which is likely if the car was not in running condition at the time of the donation), itemize the amount under charitable contributions. If, however, the car sold for $500 or more, you must use IRS Form 8283, which is available online (see Resources).

6. Many charities will allow you to make a donation in honor of someone. When you contact the charity to arrange for your donation, be sure to ask about this, if it is your preference.

Should I Consider a Third-Party Company to Handle My Car Donation?

1. Third-party vehicle donation companies (such as DonateACar.com or EasyDonateACar.com) handle all the arrangements between you---the donor---and the charity recipient. Third-party donation companies (TPDCs) can be a good option if you are in a hurry and do not have the luxury of taking the few extra steps to make sure your donation is best utilized. Many TPDCs allow you to select your preferred charity recipient, and you might be able to select a veterans or military charity. A TPDC will take over most of the legwork of car donation to make it a hassle-free process for both you and the charity.

2. The disadvantage is that a TPDC receives a significant cut of the proceeds from the sale of your car. TPDCs are not charities, but are for-profit companies. While many charities report being happy with their arrangements with TPDCs, others are less enthusiastic. You will have to use your own judgment about this issue. If your goal is to make sure the most dollars you contribute end up helping veterans, skip the TPDCs and do it yourself.

3. Unlike charities, which have to report their business practices to maintain their nonprofit status, TPDCs do not disclose their financial information. Researching which TPDC is better than another may be a herculean task. If you are still tempted to use a TPDC, at least call a charity directly and inquire about whether they prefer to use a third-party company or handle their car donation transaction directly.

Forms for Donating a Car to Charity

1. Title Transfer: On the reverse side of your vehicle title is a form for transferring the title to a new owner. Fill out this title transfer form, and fill in the name of your selected charity as the new owner.

2. Notary Republic: You may need to take the completed title (with the title transfer information filled out on the reverse), to a notary public to be notarized while you also sign the title. Some charities will take care of this step for you.

3. Limited Power of Attorney: Some charities will require a Limited Power of Attorney form, which may also need to be notarized. Again, each charity has its own regulations and protocol for accepting vehicle donations. Charities that require a Limited Power of Attorney form will provide the form for you and advise you as to whether you must have the form notarized.

4. Odometer Statement: Like the Limited Power of Attorney form, some charities will require an odometer statement form, while others will take care of this step for you. Please check with your charity as to the necessity of this form.

5. Vehicle Donation Form: Some charities require you to fill out their own proprietary vehicle donation form, usually asking standard questions such as Vehicle Identification Number (VIN), license plate number, condition of vehicle, etc. Please check with your charity as to the necessity of this form.

Should I Consider Selling the Vehicle Myself and Then Giving the Money to a Veterans' Charity?

1. Lastly, if you have made it this far, you may be wondering if you might be better off---in terms of maximizing your donation to a veterans charity and in maximizing your tax deduction---if you list your car, sell, it, and then donate the proceeds to the veterans charity of your choice. This might be your best option if you have the time and willingness to do so.

2. Why is selling the car and then donating the proceeds better? Because your tax deduction will be the exact amount for which you sell the car directly to a buyer. Usually this amount will be larger than either the charity or the TPDC would get for it at a wholesale auction.

3. And at the very least, the amount you receive for the sale of your car will be greater than the amount the TPDC would have given the charity for your car (after they take their cut). If you would have dealt directly with the charity, then selling your car will save the charity from paying staff or others to handle the logistics of your car sale.

Tips & Warnings

• The process is not complicated. The hardest parts are deciding how you want to go about it. The easiest method is to use a TPDC and request a donation to a veterans' charity. The best middle-ground is to find a worthy charity first and then donate directly to them. (Charities that take car donations will help you with the process.) The best all-around option, if you have the time, is to sell your car and then donate the proceeds to charity. Call a few veterans' charities and talk with them before you make your decision. You may be surprised what they recommend. The IRS offers a well-written brochure called, "A Donor's Guide to Vehicle Donations." (Get this brochure at http://www.irs.gov/pub/irs-pdf/p4303.pdf)

• When reporting your charitable donation, report only the amount for which the charity was able to sell your car. Do not report the fair resale value of your car, as was allowed in previous years. Fair resale value is no longer applicable for automobile charitable contributions. Use Form 8283 if your donation ends up being $500 or more in value. For questions about taxes and tax law, check the IRS website, or seek the help of a tax professional. To take advantage of the tax deduction for your gift to charity, you must itemize your deductions; that is, you use form 1040 rather than 1040A or 1040EZ when filing your taxes. If you use a third-party donation company, you will not be able to report as a tax deduction the portion of the proceeds of your car the company takes. The deductible portion of your donation is the portion your charity actually receives. The only exception to this is for those TPDCs that give donated cars directly to individuals to use as their personal cars and not to charitable organizations.

Resources

• Better Business Bureau for Charities & Donors
• Charity Navigator: Your Guide to Intelligent Giving
• Charity Watch's Top-rated Veterans & Military Charities
• IRS Form 8283 for Noncash Charitable Donations of $500 or Greater
• Edmunds.com Article: "Does Charity Car Donation Still Make Sense Under Tougher IRS Rules?"