Most charities accept car donations. The key is to find one that accepts the donation directly, processes the paperwork at the DMV on your behalf and provides a tax receipt. And it's critical that you find a charity that will directly benefit from your donation, rather than benefit the folks processing the car for donation.
Types
Be sure that the charity is a registered charity. That is, it holds 501(c)(3) non-profit status with the IRS. Most charities will list this on the website. If they don't hold non-profit status with the IRS, you won't be able to receive any tax benefit from the donation and the transfer of title becomes a regular sale of a vehicle instead of tax-deductible donation. See Resources below for a listing.
Effects
Donating a car does away with the hassle of cleaning the car up, advertising it and showing it to prospective buyers. And, if the car isn't worth that much to you, it can be of significant value to a charity. It doesn't even need to be in running condition, as cars have salvage value from which a charity can benefit.
Benefits
Federal tax law provides for a tax deduction in the gross amount of the sale or the fair market value of the vehicle. Translated, that means that you receive a tax deduction in the amount that the car fetches at auction or for salvage. You'll typically receive this information within 30 days of your donation.
Misconceptions
You must hold the title to the car that you're donating. If the car is part of an estate that has been willed to you, the title must have completed transfer to you prior to your donating it to the charity. You must have the title in hand to give to the charity at the time the car is being donated.
Warning
Make sure that the donation is benefiting the charity. Car donations have become such a popular form of charitable giving that unscrupulous companies have sprung up. They act on behalf of the charity, providing towing and salvage service, but the cost of the service is so high that the designated beneficiary receives very little. Contact the charity directly to find out how they process donations rather than simply going through the website if you have any questions.
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