Tips on Donations

Vehicle Donation

Vehicle donations are either sold with profits going to the charity or used directly at a charity. If the vehicle is being used at a charity, the donated vehicle should be in working condition as charities have limited means to repair.

The majority of donated vehicles are sold to raise money for a charity. Charities accept cars, motorcycles, vans, RVs, boats and planes. Donating a car is very beneficial for charities and offers a significant tax benefit.

Before You Donate

As a donor, it is important to take some time to review the IRS guidelines for qualifying charities and calculating the value of your deduction. We've provided links to IRS forms and publications to ease the process.

In order to receive a tax deduction for your donation, the charity you donate to must have 501 (3)(b) tax exempt status. To ensure that the charity you choose qualifies for a tax deduction, review IRS Publication 78 at www.irs.gov/eo and Search for Charities. You may also verify a charity's status by calling 877-829-5500. Be sure to have the organization's correct name and its headquarters location, if possible. Please note that not all tax exempt organizations are listed such as churches, synagogues and mosques. Any questions can be answered when you call.

Process

Most vehicle donations go through a third party that manages the process including pick up, sale and distribution of net proceeds to the requested charity. The percent that goes to charity differs depending on the third party. In most cases, the title to the car is required but some places are willing to work with you. The third party usually provides an 800 number and online form for prospective donors to complete. Once completed, the company will follow up within a couple days to schedule pick up, usually within 7-10 days. A tax receipt is issued at time of pick up.

Tax Deductions

It is your responsibility to calculate the value of your donation for your tax deduction. The IRS allows you to deduct the "fair market value" of the donated vehicle from your taxes. The fair market value is that you would sell for and a buyer would pay knowing the condition of the car.

The Blue Book value (www.kbb.com) is a good place to start for newer cars to determine this but the fair market value of your car may be much less if repairs or other work is required. For older vehicles, the Standard Guide to Cars and Prices, published by Krause Publication is a widely accepted source of prices for vehicles back to 1901. Inflating the value of your donation can result in fees and penalties from the IRS. To avoid problems with the IRS, document how you determined fair market value including pictures and mechanics records. You will need to supply this in case of an audit.

Please see IRS Publication 561, Determining the Value of Donating Property, for more detailed information. If you are donating a vehicle used for work or business, IRS Publication 526 provides guidelines on rules for donating capital gain property.

Clothing Donations

Clothes donations are either resold in thrift stores or donated directly to the needy. Donations are accepted at homeless shelters, emergency facilities, thrift stores (resale to raise money) and religious organizations. Each charity has specific needs for types (mens, womens, childrens) of clothes and the conditions in which it accepts. As a rule of thumb, the more specific the charity, the more specific the need.

In general, clothes should be slightly worn without rips, stains and holes. There are more stringent requirements for charities that collect special occasion or professional clothes. Pieces need to be drycleaned and on hangers and only accepted in specific sizes.

Clothing donations can either be dropped off or picked up. Most charities only pick up large donations and within a metropolitan radius.

Furniture

Furniture donations are resold in thrift stores, given directly to the needy or used at the charity. Smaller charities may have more specific wish lists and requirements. In general, furniture should not be broken or missing legs, knobs or other essential parts. Many charities pick up larger donations of furniture. Please note that most places do not accept mattresses.

Many charities pick up electronic donations but limit pick up area to metropolitan area.

Computers

Computer donations are used in schools, nonprofits, and for other educational purposes. Most charities have specific requirements on computer donations. Computers may need to be a certain speed and accessories are only accepted with a working computer. Please review the charity guidelines to ensure that your donation is in line with the charity's needs. Nonprofits do not have the means to upgrade old systems or fix broken computers. As a rule, donated computers should be a minimum of 486 mhz. Donations of computer parts and accessories vary on charity needs.

Most charities will only pick up a large donation of computers -- usually ten or more.

Household Goods

Household donations are resold or given directly to the needy. Homeless and emergency shelters have more specific needs and requirements for donations.

Appliances: As a rule, appliances should be in working condition. Most only accept small appliances such as microwaves. Please review charity guidelines for large appliance donations such as refrigerators.

Books/Magazines/Videos: Most places welcome books but have little need for magazines.

Bedding/Towels: Most shelters only accept twin bedding and gently worn towels.

Many charities pick up furniture donations but limit pick up area to metropolitan area.

Electronics

Electronic equipment donation, including stereos, VHS and DVD players, alarm clocks, are either resold or given directly to the needy. All items should be in working condition as charities do not have means to repair items. Smaller charities may have specific wish lists for items of immediate need.

Many charities pick up electronic donations but limit pick up area to metropolitan area.