January 30, 1998 in Nation/World

Charities Traffic In Junkers, Clunkers Campaign Designed To Lure Bumper Crop Of Donations

By The Spokesman-Review
 

The cherry-red Sentra died in the fast lane.

Its engine cranked out 147,000 miles before being laid to rest. Cigarette burns freckle the carpet. A wad of gum sits in the glove box.

The sporty little car is about to be reborn into something nobler.

It could become a bowl of soup for a hungry family, medical care for a pregnant teen, a trip to summer camp for a poor kid.

The 1983 Nissan was donated to charity, among the first given to a fledgling program that converts clunkers into cash for Spokane’s needy.

Its engine, tires, doors, hood, battery and seats have been stripped and sold. After the parts buzzards have picked it clean, the car should bring in $150 to one of 11 United Way charities.

The campaign is unique to the Inland Northwest, but programs similar to Spokane’s Cars for Charity are on the rise nationwide as nonprofit agencies seek a fresh wrinkle to old fund-raising strategies.

A campaign in Calgary, Alberta, nets up to $100,000 a year. A Dallas group - one of a dozen in the city soliciting cars for charity - raked in $340,000 last year.

But with the big profits have come big problems. Partnerships between private companies and nonprofit agencies in other cities have dissolved into fraud charges and scandal.

Profits since the Spokane campaign started in November have been economy-sized: $5,000 from 62 cars.

Most are junkers, but several older vehicles that still run await sale, including a brown 1972 Dodge Ram van worth about $2,000.

Charities pitch the program, which offers free towing to donors, as a tax write-off and an easy way to get rid of rusting neighborhood eyesores.

The tax break is a big selling point. More than 20 cars were donated in the last week of December, just in time for a 1997 write-off.

“At some point, you just say, ‘Geez, I’m not really sure if it’s dependable, and it’s such a hassle selling,”’ said Al Brislain, Spokane Food Bank director and owner of a failing Dodge Omni he is considering donating.

“This way, it’s hassle-free. It’s easy. It’s really a win-win situation.”

Nonprofit agencies say coming up with fresh fund-raising ideas is vital due to shrinking government support, increased demands and increasingly tough competition for donations.

“In our case, because of welfare reform, things such as substance-abuse programs are cut back, and unfortunately, the need is still being expressed,” said Bernadine Spalla, executive director of YFA Connections, which serves families in crisis.

“What we’re trying to do is bolster some of the (dwindling) federal revenues with community-based money.”

The campaign was conceived by Max Spaulding, owner of a Spokane Valley wrecking yard and a member of the United Way board of directors.

Cars for Charity operates out of the offices of one of Spaulding’s companies, Pull & Save. Employees answer phones and fill out Cars for Charity paperwork.

The company, under a contract signed with each nonprofit agency, can deduct towing fees and up to $300 in detailing or engine work if the car is sold. It also deducts from profits any outstanding liens on the cars.

All other proceeds go to the charity of the donor’s choice.

Vehicles must have titles and be clear of clutter.

Russ Spaulding, speaking for his father, says the company benefits by helping the community and boosting its stock of available cars.

“It’s a three-way win,” he said. “The donor wins; the charity wins; we win because we want the cars.”

The nonprofit groups praise Spaulding’s generosity and anticipate no problems.

“We’ve seen a lot of people trying to make money off nonprofits,” said Spalla, who is coordinating publicity for the campaign. “In this case, I’m very comfortable with (Spaulding’s) motives.”

But the Spokane charities also created a special oversight committee that will get detailed paperwork and monthly audits of Pull & Save’s receipts, Spalla said.

The program will be reviewed in September.

“When it comes to a private nonprofit and a private for-profit company doing a partnership, there’s always a need for independent oversight,” Spalla said. “Nonprofits now are a little more savvy about what they get into.”

Charities elsewhere weren’t.

Civil charges alleging false advertising are pending against a San Francisco organization running a lucrative cars-for-charity program.

The Jewish Educational Center spent a quarter of the $6.9 million raised from car sales on charity. The group’s founders allegedly spent $30,000 in charity funds on their son’s bar mitzvah.

Detroit’s Charity Motors gave to charity only 34 percent of its $2.1 million haul from car sales in 1996 while paying a charity founder $250,000 in consulting fees, according to published reports.

The group claimed to help 6,000 poor people with cheap transportation. But that boast is an assumption that poor people bought cars off its lots.

Watchdog groups are monitoring charity car campaigns. So far, Spokane’s Better Business Bureau reports no problems with Cars for Charity.

Donors should ask charities lots of questions before giving, said Bennett Weiner, vice president of the Council of Better Business Bureaus. If they aren’t answered, beware of a rat.

“The bottom line is: Look before you leap,” Weiner said.

, DataTimes ILLUSTRATION: Color Photo

MEMO: These 2 sidebars appeared with the story:

1. GOT A JUNKER? Cars for Charity can be reached at 928-1900. Proceeds benefit ARC of Spokane, American Red Cross, Camp Fire Boys and Girls, Children’s Home Society of Washington, Eastern Washington Center for the Deaf and Hard of Hearing, Excelsior Youth Center, Martin Luther King Jr. Family Outreach Center, Spokane Food Bank, Spokane Guild’s School, United Way and YFA Connections.

2. QUESTIONS ABOUT DONATING YOUR CLUNKER Before donating a car to charity, the Council of Better Business Bureaus and National Charities Information Bureau recommends you ask yourself these questions: Is the charity eligible to receive tax-deductible gifts? Request the organization’s IRS Determination Letter, generally about two pages. Look for verification that the group has filed under Section 501(c)(3) of the tax code. Churches are not required to apply for tax-exempt status. Is this a charity I want to support? Request copies of its most recent annual report and IRS 990 form, which specify how the charity spent its money. Call the Better Business Bureau to check for complaints. What happens to donated cars? Ask what specific program your donation will benefit. Will proceeds pay for advertising to solicit more cars, or on program services? How much does the charity get for each car? If an outside dealer is involved, does the charity get a flat fee per car? Can I get a receipt? Ask for one documenting the donation. If the value exceeds $500, the donor must complete IRS form 8283. If the value exceeds $5,000, the donor must get a written appraisal of the car.

These 2 sidebars appeared with the story:

1. GOT A JUNKER? Cars for Charity can be reached at 928-1900. Proceeds benefit ARC of Spokane, American Red Cross, Camp Fire Boys and Girls, Children’s Home Society of Washington, Eastern Washington Center for the Deaf and Hard of Hearing, Excelsior Youth Center, Martin Luther King Jr. Family Outreach Center, Spokane Food Bank, Spokane Guild’s School, United Way and YFA Connections.

2. QUESTIONS ABOUT DONATING YOUR CLUNKER Before donating a car to charity, the Council of Better Business Bureaus and National Charities Information Bureau recommends you ask yourself these questions: Is the charity eligible to receive tax-deductible gifts? Request the organization’s IRS Determination Letter, generally about two pages. Look for verification that the group has filed under Section 501(c)(3) of the tax code. Churches are not required to apply for tax-exempt status. Is this a charity I want to support? Request copies of its most recent annual report and IRS 990 form, which specify how the charity spent its money. Call the Better Business Bureau to check for complaints. What happens to donated cars? Ask what specific program your donation will benefit. Will proceeds pay for advertising to solicit more cars, or on program services? How much does the charity get for each car? If an outside dealer is involved, does the charity get a flat fee per car? Can I get a receipt? Ask for one documenting the donation. If the value exceeds $500, the donor must complete IRS form 8283. If the value exceeds $5,000, the donor must get a written appraisal of the car.


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