Donation has become the great equalizer because of its ability to support nonprofits both large and small
Oakland, CA November 5, 2009 — The Vehicle Donation Processing Center proudly announces its 800,000th Car donation! Charitable donation and saving on taxes constitute the two biggest reasons the Vehicle Donation Center has found so many goodhearted folks to help out with their car donations. It is interesting to note that the 800,000th vehicle donation didn’t run. This 1986 Toyota Pickup joins the other 60% of cars donated through the Center that won’t start up for their owners anymore. No problem, says Phil Kraft, Executive Director of the National Veterans Services Fund. Phil was happy this Palm Springs, California resident chose his group and likes it when his supporters donate a car, whether it is running or not, as detailed below.
The Vehicle Donation Processing Center has come a long, long way since 1996, when it started out in an unused bedroom of one of the two cofounders of the company, John R Learned. Learned and fellow cofounder, Harvard E.”Pete” Palmer Jr., while successfully pursuing more traditional business careers, noted the legislation when it first came out of Congress in 1986 and hoped they could find a way to use this new charity donation methodology and their accumulated skills to help important causes and those in need. The two businessmen watched, especially smaller charities, stumble with the difficulties in handling 2000 pound, rusting old sleds — all way past their prime.
Congress, in drafting this unique bill, realized there was a need for additional methods to fund vital charity services to the public which they stated, very directly, in the legislation. Since that time, millions of old cars and occasionally newer cars were donated to charities by hundreds of thousands of different individuals. Yes, car donation has been a win/win for all three; the car donating public, the non-profit sector, and the charity recipients of these important services.
Car donation is not as simple to administer as one might initially think. How can the charity convert old cars into cash? The woman or man who wants to donate a car is looking for convenience. If they were prepared to go to a lot of trouble they would probably sell their old car instead of responding to charity outreach for a car donation.
So the charity (and in this case the Vehicle Donation Processing Center acting on behalf of the charity) must find a way to get the car donation moved from the donor’s location to the place where car donations are sold. Some charities or their processors would ask the individual who inquired about car donation to drive their car to the liquidation center. Not only would that cause a burden on the person who wanted to donate a car it would create a potential liability for the charity. Therefore, the safe and convenient way to process car donations is to have that car towed by a qualified, properly insured transportation company. The Vehicle Donation Processing Center carefully vets and utilizes hundreds of different towing companies all across the country.
Some companies that process car donations utilize used car lots in the liquidation phase. The Vehicle Donation Processing Center doesn’t think that’s a very good idea. The company prefers to utilize an auction that specializes in liquidating car donations. Whenever charitable fund-raising is concerned, transparency is vital. One used-car salesman talking to one used-car buyer is the epitome of a non-transparent situation. By contrast the auction environment where the public, car dealers, junk dealers; all persons interested in purchasing auto donations can bid against one another, is the proven method to bring the highest amount of revenue back to the charities — and revenue to charities is why Palmer and Learned got in this business in the first place.
When people talk about vehicle donation you hear words like junker, sled, hooptie or just old car. Well that is a fair representation of the great majority of car donations. Frankly, some car donation processors are fussier than the Vehicle Donation Center. Many of these companies, when called in hopes of placing an auto donation, may ask a long series of questions and more often than not, decline to take your car donation. This is known as cherry picking in the donated car industry. Cherry picking is a method to make more average profit per car, allowing such a car donation processor to minimize its own costs. Does this practice create more revenue for the charity? Learned and Palmer think not.
For example, if the cost of towing and the auction and other minor fees was $200 and the car donation would sell at the auction for $205, wouldn’t the charity rather have the extra five dollars than have had their processor decline the donation and disappoint a car donor who had graciously attempted to support that charity’s mission? Adding insult to injury the charity lost the five dollars, too. That’s why the Vehicle Donation Processing Center always does its best to accept every car offered for donation to one of their client charities. There are situations where the Center must decline a particular car but they are darn few. And in those instances where the company accepts a car donation and the expenses exceed the proceeds, that loss is absorbed by the company at no cost to the charity client.
As practiced by the Vehicle Donation Processing Center, car donation has become a great equalizer because of its ability to support nonprofits both large and small. From small neighborhood groups with focused local agendas, like the Chico Cat Coalition, a long time Vehicle Donation Center client, to the largest charities in the land, like the Red Cross or the Kidney Foundation, car donation has proven itself to be an across the board winner. The big national charities do very important work but by necessity they require larger paid staffs. Many of the smaller groups the Processing Center represents are completely staffed by volunteers who sometimes even work from their own homes. This can make for a higher percentage of net proceeds being applied to charitable services. The Vehicle Donation Center’s ability to handle the entire activity for these groups such that they can participate in car donation fundraising practices has been key.
As of this writing, more than 400 nonprofits have elected to use the company’s services in processing their vehicle donations. This work has provided $60 million net (after all miscellaneous expenses) to charity clients for their mission delivery — one old donated car at a time has now become 800,000 people who have saved on their taxes and charities have thereby funded their vital missions.