Car Donation Programs in Australia?
Monday, 7th March 2005 at 12:03 pm
While the US is tightening the rules around vehicle donation programs worth billions of dollars annually to charity, one West Australian Not for Profit is accelerating plans to run what it says is the country’s first ‘Donate a Car’ program.
WESTCARE Industries has set up a “Donate a Car” program to help local people with disabilities.
Westcare currently employs 123 people with disabilities and accommodates and trains a further 50.
Western Australians are being encouraged to donate their vehicles which will be sold in auctions and the sale money will be used to help those in the local disabled community.
Peter Beaton, Westcare’s Chief Executive Officer says there are a number of benefits for the donor including a hassle-free way of selling their car whereby they can avoid liabilities associated with the transferring of automobiles.
Beaton says the donation may earn the donor a potential tax deduction. Eligible cars must be worth more than $5000 and the valuation has to be authorised by the Australian Tax Office.
As well he says the value of the donation will be maximised by the selling of the vehicle at Perth’s best automobile auctions.
Vehicle Donation programs have been an established fundraising opportunity for decades in the US.
But it tightened the legislative screws on vehicle donation programs with new rules from January 1st, 2005 after complaints that US taxpayers were claiming deductions far in excess of the vehicle’s actual value.
In an effort to reduce abuse, US legislation now requires the charity to provide the taxpayer with a written acknowledgment of the donation, a receipt listing the sale price, vehicle identification number and donor’s tax file number within 30 days of the donation of the vehicle and limits a donor’s tax deduction to the gross proceeds.
Between 400,000 and a million cars are donated to charities each year in the US. There are thousands of ‘vehicle donation program’ operators and the larger ones bring in more than US$10million a year! They operate as the middlemen between the charity and the donor.
An IRS investigation found that an analysis of 54 specific donations found that charities actually received less than 10% of the value claimed on the donor’s return in more than half the cases, and many actually lost money on some vehicles.
Westcare’s General Manager, Peter Taliangis says as the Not for Profit running this program in Australia it will be efficient and responsible and aims to provide 55-80% of the gross sale price of the car direct to Westcare .
The program has been set up to allow car owners to donate on-line, print and submit the forms with their car title and coordinate the delivery of the vehicle.
Peter Taliangis says that ideally Westcare hopes to bring in 10-20 cars initially with an annual income of around $100,000.
He says Westcare is now in a learning process and trying to establish a successful model that it will happily share with other Not for Profits.
For more information about the “Donate a car” program call (08) 6389 4100 or visit the website at www.donateacar.com.au.