Los Angeles Examiners

R.E. Xavier
L.A. Small Business Examiner
Most Recent Article
Small Business Reality Project (from the Small Business Doctor)
Walid Nasserdeen
L.A. Finance Examiner
Most Recent Article
Bull/Bear Ratio: A Contrarian Indicator
 
 

Multimedia News

Grammy Nominations Concert highlights
20 photos
Christina Aguilera arrives at 'The Grammy Nom...
Rockefeller Center Christmas tree lights up
20 photos
People look on from office windows as the Roc...
Celestial love triangle
20 photos
The crescent moon is accompanied by planets V...
Britney's back with new album, tour
20 photos
Singer Britney Spears performs on ABC's 'Good...
World AIDS Day: Observing a global epidemic
20 photos
Children from the Andile School choir sing du...

Last year’s tax laws hurt local nonprofit’s fundraising efforts

Dec 18, 2006 12:00 AM (718 days ago) by Katie Wilmeth, The Examiner
This story ranks Not ranked
Related Topics: WASHINGTON
WASHINGTON (Map, News) - The allure of a tax write-off will get many Washingtonians to send last- minute donations to charitable organizations in the remaining weeks of 2006. But while local nonprofits will see a spike in cash, clothing and other goods, many are still reeling from tax laws put into effect last year that made it more difficult for would-be givers to donate their car.

Many area nonprofits raise thousands or even millions of dollars each year by auctioning off donated cars. But new requirements instituted by the Internal Revenue Service in 2005 lowered the tax write-off for the majority of people who donated a car. Instead of deducting the fair market value of the car — which was the previous rule — donors can only deduct the amount that the car sold for at auction, meaning the deduction could be significantly less than anticipated.

“It certainly hurt us because we saw our revenues drop by a couple hundred thousand dollars,” said Brendan Hurley, senior vice president of marketing and communications for Goodwill of Greater Washington.

The organization expects to accept about 150 cars this year, down from about 250 in 2004.

This story continues below
Advertisement

The new rule was the IRS’s “way of making sure you’re not inflating the value [of the tax deduction],” said Sandra Miniutti, vice president of Charity Navigator, a Mahwah, N.J.-based organization that tracks the financial health of the countries largest charities. “But any charity that offers these kind of donation opportunities will be savvy enough to walk you through the process.”

While Goodwill’s car revenues only represent about 1 percent of their total fundraising efforts, other local charities leaned on the donations much more. Melwood, an Upper Marlboro-based nonprofit that provides job training for people with developmental disabilities, lost millions in revenue as a result of the new rule.

In 2004, Melwood brought in about $12 million from the sale of 27,000 cars. Last year, that number fell to $6.8 million and 17,000 cars.

Most charities have turned to diversifying their fundraising efforts to make up for the lost revenues. Melwood added a charity golf tournament to its 2007 line-up.

For those who still want to donate their car, nonprofit analysts suggest giving it to a charity such as Meals on Wheels that will use it rather than auction it off. In those cases, donors can deduct the fair market value of the car.

“That would be the ideal situation,” said Daniel Borocoff, president of the American Institute of Philanthropy, a Chicago-based charity watchdog group. “That way you don’t have to worry about what it gets sold for and you can feel good that it’s getting used.”

kwilmeth@dcexaminer.com

Add a Comment


Name: (required)
Comments:
characters left
Comments are regulated by the Terms of Use.

Comments from Examiner Readers

11:35 AM MST on Fri., Nov. 14, 2008 re: "Young chopper mechanic searching for new owner"

kenny said:
i honor that kid , now .. that is talent!

Vote on this comment: I agree or I disagree

3:03 PM MST on Tue., Aug. 26, 2008 re: "Franciscan Center helps needy become self-sufficient"

Examiner Reader said:
We need to see an updated story on the center they celebrate 40 years this year.

6 agree | 5 disagree
Vote on this comment: I agree or I disagree
10:36 PM MST on Tue., Jun. 10, 2008 re: "Young chopper mechanic searching for new owner"

Examiner Reader said:
Funny that the point has been lost in this article.Better take a good look at what you get into.

18 agree | 16 disagree
Vote on this comment: I agree or I disagree
4:44 PM MST on Thu., Jun. 5, 2008 re: "Group seeks summer activities for low-income youth"

James Hall said:
I'm honored and blessed to be working in the Youth Service arena, however I'm having difficulties locating events and activities for our youngmen who range from 12 through 18. The Summer for AT-RISK youth can offten be extremely dissapointing. If your agency has any resources that we can access please forward them to: James Hall; diamona4sure@yahoo.com. Our kids would really be greatful and appreciative!!! Mr. James Hall, Counselor Our Fortress Homes, Inc. 410-485-4958

16 agree | 16 disagree
Vote on this comment: I agree or I disagree
10:13 AM MST on Tue., May. 27, 2008 re: "Unusual nonprofit makes youth dreams come true"

Examiner Reader said:
I guess the answer to my previous question is, "No, Mr. Corrigan is incapable of writing about anything other than Nonprofits." I guess the Examiner realizes that if he writes about anything else, Mr. Corrigan only spouts he own political views instead of reporting.

28 agree | 18 disagree
Vote on this comment: I agree or I disagree
10:22 AM MST on Tue., May. 20, 2008 re: "Soros group works behind the scenes on justice, education, drug treatment"

Examiner Reader said:
While I realize that Mr. Corrigan has limited writing skills and he enjoys wearing out his Thesaurus in an attempt to impress people with his vocabulary, can't he write about anything other than Nonprofits?

26 agree | 17 disagree
Vote on this comment: I agree or I disagree
10:56 AM MST on Wed., May. 14, 2008 re: "Group seeks summer activities for low-income youth"

Examiner Reader said:
At least this time Mr. Corrigan wrote a variation on his theme of the past 10 weeks, instead of just the same story with different words.

25 agree | 17 disagree
Vote on this comment: I agree or I disagree
11:57 AM MST on Tue., Apr. 29, 2008 re: "Ministry stresses local entrepreneurship"

Examiner Reader said:
It seems as though the Examiner just lets Mr. Corrigan recycle the same story every week or so, and has let him do it for about the last 9 weeks. As much as I support recycling, I think it might be time for a new topic.

26 agree | 19 disagree
Vote on this comment: I agree or I disagree
4:59 PM MST on Thu., Dec. 6, 2007 re: "Washington-area nonprofits coordinate different crisis-management strategies"

Examiner Reader said:
It's only a matter of time. Plan thoroughly, consider all options, and where roadblocks are placed before you, find alternatives. Remember that during the Katrina evac, all the buses where in the up-scale part of town that the walkers from poor sections couldn't get to in time. Please be careful. People need you, but there are those who don't want you to succeed.

229 agree | 170 disagree
Vote on this comment: I agree or I disagree
8:32 AM MST on Thu., Nov. 22, 2007 re: "Study: Nonprofit employment growing faster than private sector"

Examiner Reader said:
With all the shady, non-taxed, I mean, so-called, non-profits in Maryland, working for a non-profit is working in the private sector.

193 agree | 193 disagree
Vote on this comment: I agree or I disagree
11:40 AM MST on Tue., Aug. 14, 2007 re: "Marian House helps at-risk women cultivate independence"

Huh? said:
"[T]his $1.6 million, 22-employee nonprofit has a track record to support its claim." Okay, fair enough. So, what's the track record? Also, if the org has helped about 1,000 women since 1994, that's fewer than 90 women per year and there are 22 employees! It had better be successful at that ratio. Another point: Not-for-profit is merely a tax status. It does not mean that administrators cannot earn a handsome salary. I am not suggesting that is the case here but there's a reason these places don't share that info without being asked.

298 agree | 267 disagree
Vote on this comment: I agree or I disagree
8:50 AM MST on Tue., Jul. 3, 2007 re: "Martha’s Place promotes hope for women overcoming addictions"

Examiner Reader said:
As a woman in recovery who needed balance in my life recovery houses such as M artha"s Place deserve to recieve all the available resources to help restore self-esteem, and save lives. How can we mimnimize lives by withholding funds. I am an alumni who's life has been restored because of Martha's Place! I thank God for Elder & Mrs.Harris for leaping out into an area many others have not and willnot accept the challenage to save lives!

324 agree | 314 disagree
Vote on this comment: I agree or I disagree
12:18 PM MST on Tue., Jun. 19, 2007 re: "Health Care for the Homeless to expand services"

Examiner Reader said:
Hi! Thank you so much for printing this article. It is a wonderful summary of what this incredible organization does. My husband works for Jeff Singer. Jeff is an incredibly humble, gracious and loving person. He truly cares about each person who comes through his Center. He deeply appreciates the job that everyone does on a daily basis. One can only truly appreciate the magnificent compassion and respect this organization offers to our homeless friends by visiting the center and helping face-to-face, hand-to-hand and heart-to-heart as this family reaches out to those in need. Thanks again for helping to make our neighbors aware of the needs of our brothers and sisters and the assistance provided by these loving angels of mercy!

705 agree | 336 disagree
Vote on this comment: I agree or I disagree
12:20 PM MST on Wed., May. 23, 2007 re: "D.C. charity helps kids pump clean water in Africa"

Matthew C. Andrea said:
Please post the contact information for PlayPumps International. This concept is brilliant, fun and uplifting. Definitely something that I would like to support.

663 agree | 362 disagree
Vote on this comment: I agree or I disagree
7:21 AM MST on Wed., May. 2, 2007 re: "Advisory board trims list of nonprofit grant applications"

Examiner Reader said:
When is Montgomery County going to realize that Casa of MD is taking them/us to the cleaners?

628 agree | 423 disagree
Vote on this comment: I agree or I disagree
Advertisement