Is Donating My Car a Scam?

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Happy Consumer Protection Friday. (If I keep writing it perhaps others will join in and make it a real thing.)

Typically, I cover MLM scams because I find it interesting how they confuse victims into thinking they are legitimate business opportunities. This week I'm switching it up. I'm going to look into car donation charities. You've probably heard those annoying, earworm, jingles sung by kids on the radio (yes Kars4Kids I'm looking at you... and please make an attempt to learn to spell).

Are they good charities or should you put your money elsewhere? Let's find out.

To start, I should mention that I normally wouldn't have thought about car donation companies being scams. I've gotten rid of one car in the last 15+ years and it was a sale as a private party. I don't remember how I moved the cars before that.

Car donation scams cross my radar when this LA Times headline piqued my interest: California Atty. Gen. Kamala Harris sues to shut down 2 car donation charities.

It's not very often that I hear about Attorneys General suing companies. It is less often that those companies are charities. The article was full of information that I didn't know. This was perhaps the gem: "...car donation organizations give a much smaller portion of the donations they receive to charity than similar sorts of fundraising campaigns, spending nearly two-thirds on salaries for their own employees and other administrative costs."

So if you donate a car worth $9,000, you are really only giving $3,000 to the people who need it.

Is that really a scam? I say that a scam is in the eye of the beholder and my opinion of a scam is not necessarily going to be yours. That said my opinion allows for a very broad definition.

These car charities definitely fit my opinion of a scam. Why? Simply because it isn't what a consumer (or in this case the charity gifter) would expect. It feels to me that the organization exists to create well-paying jobs for the people who work at the organization... and maybe give away some money to help others in need in order to sleep well at night. Aside from the salaries at the charity, there are also high advertising costs (the radio airtime on those jingles isn't free) to bring in the money for the jobs and the recipients of the charity. Finally, I presume that the cars often need to be fixed up before being passed on to the recipient.

So then I went to look for more articles. I found this one on Kars 4 Kids, which said:

"According to [Doug White, professor at Columbia University], many car-donation-based charities that operate under this simple model 'hoodwink' the public, losing a large portion of the money raised from the sale to the middlemen who recycle the car or sell it on behalf of the charity. Kars 4 Kids is one of the few that does most of the work in house and thus avoids many of these losses."

I'd definitely call "hookwink" the same as "scam", wouldn't you? However, it at least sounds like Kars for Kids might be a good charity because it doesn't use the middleman, right?

Not so fast.

NBC's New York affiliate found:

"Financial statements for two nonprofits associated with Kars 4 Kids show the charity lost more than $5 million on real estate investments in 2010. In the same time frame, Kars 4 Kids spent about $6 million on programs for children."

That makes it sound like it's "Kars 4 Real Estate Investments" doesn't it? There's also this:

"In 2009, attorneys general in Pennsylvania and Oregon forced Oorah to pay $130,000 in fines for failing to disclose the religious purpose in ads."

You didn't realize that Kars 4 Kids (which gives its money to Oorah and Joy of Our Youth) is a religious organization. I didn't either. It's fine to donate to religious organizations, but maybe people would donate to a religion of their own faith... if the jingle actually disclosed it.

Fortunately, it looks like I'm not the only one to cover this. It seems like BankRate has a consumer warning. About.com is very blunt: "The ads that you see everywhere that offer to help you make a car donation to charity are almost always rip-offs."

So how do you avoid these car donation scams? I'd personally just avoid donating cars and money to them. If you have a car that is working condition, perhaps you can sell it for cash. Then donate the cash to a reputable charity that you've researched and vetted. This way, you know where your money is going.

P.S.

Years ago I created a car site with a friend's help. I had forgotten about it until this article. It turns out that How to Donate a Car is one of the most popular articles. Now I have to go back and see if the author I hired was accurate.

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... and focuses on:

charity, scams

Posted on December 18, 2015.

I Love Gisele’s $700 Coffee Table Book!

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On Monday, I published a Devil's Advocate post on Pharma Bro. If you were hiding under a rock, he jacked up the price of a medication by 40 times what it used to sell at. The "collective internet" (if there is such a thing) is upset at him... and justifiably so.

There was another bit of "crazy pricing" "news" that slipped under the radar last week. Pharma Bro's drug wasn't the only thing that seemed to be jacked up from $18 to the $700 range. News came out that Supermodel Gisele Bundchen will be making a $700 coffee table book available in November. In case you are wondering, it will contain all the things that make Gisele the highest paid model in the world... pictures.

They are probably a little more interesting this one:

Gisele Showing the Love

Gisele Showing the Love. She's the older one. The younger one is my son's future wife.

At least with a pharmaceutical, you'd be getting something potentially life saving, right? Who needs a $700 coffee book, rigth? Doesn't this feel like Kanye’s $120 T-Shirt?

I'm sure the book itself is not cheap to make. Our wedding photo album wasn't cheap, and it didn't have nearly the 300 photos in Gisele's book.

However, the big difference here is what I got to at the end of the sale page. I feel like they buried the lead:

"Gisele is donating all her proceeds from the book to charity."

And that's the difference. That's why people love Gisele and hate Pharma Bro. Sure go ahead and charge an outrageous price, but if it's optional, the money goes to charity, and you are being straight-up with what you are selling, I'm on board.

I'm not sure if my wife would be on board (and it certainly isn't in the budget). That only increases your chances of being one of the lucky 1000 people who will own the book, right?

In a related story, I got a tip that a non-profit charitable organization may be able to get a signed football by Gisele's husband, Tom Brady, to auction off as a fundraiser. I was told this by someone affiliated with such an organization. She may not have meant it this way, but I've got a new savings goal for my Digit Account.

I have a feeling my wife might be a little more open to this purchase. However, the next time she's watching a red carpet show and complains about me watching football, I might remind her that we could have had a Gisele book instead.

How do you feel about donating to charity to get things? On one hand, I feel like donating to charity is it's own reward. On the other hand, I feel like I might as well get something cool if the thing is of nominal cost (such as a football or a book).

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Last updated on May 11, 2016.

From Ice Buckets to Polar Dips: Making Your Fundraising Go Viral

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[Editor's Note: This is a guest post from a reader who goes by Tanya O. I had thought about not publishing an article about ice bucket challenge since it gets so much media coverage already. I changed my tune after seeing a commercial last night about the dangers of the "fire challenge" where (mostly) teenagers dangerously and stupidly set themselves on fire for no reason other than to try to get YouTube views. To quote the immortal Jayne Cobb, "Where's that get fun?"

So in stark contrast to that, I figure why not post about the ice bucket challenge, that when done correctly is relatively safe and has lead to significant charity contributions.]

By now, you’ve probably seen at least one person on your social media feed — or seen someone on national television — dumping a bucket of ice over his or her own head in the name of charity. The ALS Challenge, started by a Massachusetts family who wanted to raise money and awareness for the disease more commonly known as Lou Gehrig’s disease, asks people to challenge their friends to either film themselves dumping a large bucket of ice water over their heads or donate $100 to ALS research.

Some naysayers question the value of such a “challenge,” arguing that the results are short term and that the real beneficiaries in the challenge are the companies selling ice, but in reality, it’s working: major ALS research and support organizations are reporting a huge surge in donations. The ALS Association usually raises about $22,000 in July — this year, the organization reports bringing in about $1.35 million. Other organizations, like Project ALS and the ALS Therapy Development Institute, report as many as 50 times more online donations than usual because of the campaign.

So what is it that has made the Ice Bucket Challenge so successful? ALS is certainly a worthy cause, but it’s more than just the cause that makes a fundraising campaign go viral — and this particular campaign has hit all the marks.

Viral Fundraising: The Trend of Our Times?

Ask any marketer, and he or she will tell you that going viral is often the ultimate goal of their campaigns, whether they are raising money for a cause or selling tuna fish. When your video, photo or blog post goes viral, the potential audience increases exponentially.

However, a lot of viral content doesn’t maintain that momentum for longer than a few days. As a fundraiser, a few days of increased donations are great, but as the Ice Bucket Challenge shows, a few weeks are even better. So what has this campaign done right?

The challenge made a reasonable donation request. Asking people to donate thousands of dollars to a cause is unreasonable. Asking people to donate $100, or less, is. Many people who complete the Ice Bucket Challenge also donate to the cause.

The challenge took advantage of the need to be “seen.” Another reason for the success of the Ice Bucket Challenge is that it taps into the very heart of why people use social media: they want to show off to their friends, especially when they are doing something altruistic or “good.” How better to do that than asking people to actually post videos of themselves in action?

Campaigns that go viral give people a chance to show off, for better or worse. That means that you have to encourage donors to share their act, whether it’s a silly act like pouring ice water their heads, or saying goodbye to their old boat when they donate the vessel to charity.

The challenge was crafted to appeal to social networks. Again, social media is, well, social. Each person who supports your cause has a network of hundreds or thousands of other people who could be potential supporters. The Ice Bucket Challenge has succeeded because it requires participants to call out specific people in their network (most nominate three to five others) to complete the challenge or donate. Not only does this spread the message far and wide — and guarantee that most people will see at least half a dozen of their friends completing the challenge — but it raises the social stakes. No one wants to be the person who ignored the challenge, so they participate in some way.

The challenge is unique. Let’s face it: The Ice Bucket Challenge itself is silly. And it really has nothing to do with ALS. But it gets attention, because it’s human nature to want to see others in uncomfortable or incongruous situations. Many organizations have been successful by tapping into emotions, but it’s rare that something serious and heartfelt goes viral. If your organization can find something funny, that isn’t dangerous and gets attention, then you have a better chance of going viral.

The challenge is simple. Not only is the Ice Bucket Challenge itself easy to do, but the message is simple: Do this, or donate to the cause. There’s no complicated back-story, no scripted pitch — just regular people asking others to help. When people decide to donate, they should be able to easily find information about your organization and your mission, but if you want to go viral, keep it simple.

In the coming months, many organizations will try to recreate the success of the Ice Bucket Challenge. If yours is one of them, keep the principles of an effective viral campaign in mind, and you may just find yourself the next viral fundraising sensation.

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Last updated on August 23, 2014.

Don’t Forget Charity

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Over the years, I've spent a lot of time doling out advice on how to save money or fix your finances. What I haven't written much about is what to do with all the money you save. I figured that part is up to you. That money could go towards buying new stuff. Or maybe you want to invest it with the intention of retiring early.

However, today I'd like to make a case for donating at least some of those savings to charity. I realize that some of you don't have a lot. If that's the case, I understand, this isn't the post for you.

However, if you are doing fairly well financially, perhaps think about making a donation to your favorite charity. If you are one of my mostly American readers it is easy to take for granted all the benefits that we have here. Many don't have clean running water, much less an Internet connection to read this.

Many charities have a rush of money at the end of the year as people look to stack up tax deductions. That's great, but it comes to a screeching halt in January. So this is the time of the year to surprise them with a donation.

I'm not going to tell you what charities you should support. That's a personal decision. I like to support our troops (via the USO or Wounded Warriors) and dogs (just because I love them). Lately, though now that I have children I'm thinking I might donate to UNICEF.

It does not necessarily have to be money that you donate either, as you can give old items that you have no intention of using. For example, if you have an old boat that you are unlikely to use again, you can donate it to charity. The process is easy, as you simply contact a boat donation charity and they will sell it at auction. The money then goes to a children's charity to help those who need it the most. Now that you know how to donate a boat, you have another option when giving to the less fortunate this year.

As Sheppard Book said in the movie Serenity, "I don't care what charity you believe in, just donate to it." Okay he didn't say that at all. He really said, "I don't care what you believe in, just believe in it." It's one of my favorite quotes about religion though, so I had to fit it in.

I'll step off the soapbox for now. I'll mark my calendar for another charity post next year.

This post deals with: ... and focuses on:

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Last updated on August 23, 2014.

Eliza Dushku, THRACE-Gulu, and Charity

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It's almost the end of the year and for some of you that means finding a bit of money for charity. After all, it is a tax deduction, right? There are a lot of deserving charities out there. I think we all have our favorites. I thought I'd write today about one such charity that Lazy Man and Money just donated money to.

The charity is THRACE-Gulu. The name didn't make much sense to me until it was broken down as "Trauma Healing and Reflection Center in Gulu, Uganda." The money goes to helping children affected by the civil war in Uganda. Anyone who knows me, probably realizes this is the most random charity of charities for me to donate money to. After all, my dad died of cancer when I was 14. (Rest assured, I do donate a healthy sum to Cancer research, I just don't write about it much). So why am I looking to help these children half a world away?

Eliza Dushku

It's difficult for me to explain why without sounding all Swimfan-y, but I'll give it a shot anyway. As many regular readers know, Buffy the Vampire Slayer is my favorite show of all time. In fact, I use the character names from time to time on this website. Eliza Dushku came in the third season and single-handedly took over the show. It put her on the map as actress. She made all the magazines as everyone was asking, "Who's that girl?" I wasn't alone in wanted to learn more about her.

It is often the case with sports and movie celebrities, that what you find out is very underwhelming. Eliza was different. The first thing I noticed was that she was from Watertown, Massachusetts a city that borders where I grew up. The other thing that I read is that she grew up volunteering her time to read to the blind. That fact is so hidden by all her other accomplishments that it took me quite a while just to find that subtle reference to it. So I'll sum up my connection here. A famous person from my favorite television, who grew up nearly a few blocks away, has a heart of gold...

... and she's asking for your help.

On December 30th, she's turning 30 years old. She's doesn't want any presents from you. Instead she's looking to raise $30,000 for the THRACE-Gulu non-profit that her mother, a renowned Suffolk University professor, started. She's named the effort as her "30/30/30" birthday wish. She's taken to Twitter in a huge way (you can follow the effort with the hashtag #303030bday). However, her efforts stretch beyond just asking for donations... she is auctioning a 10 minute video chat on Ebay and as of this time it is already valued at $610.

So how much did Lazy Man and Money donate? It felt right to give $30 to cause. If you'd like to join me and give some money to a worthy cause you can donate here. I encourage you to check out the pictures and video from Eliza's trip to Gulu to meet with the children. It may just touch you like it did me.

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Last updated on August 1, 2011.

Blog Action Day: Thoughts on Poverty

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(Last year, I decided to join the crowd and post about Blog Action Day's topic, saving the environment. This year the cause for Blog Action Day is poverty. As a personal finance blogger, I felt that it would border on irresponsibility to not join the cause. One of the charities they suggest is one that I've been meaning to give back to for some time... Kiva.org. For those unfamiliar with Kiva, it's a peer-to-peer lending company. Unlike Prosper.com, with Kiva people lend money to people in third world countries so that they can literally change their lives. People do this with no expectation of interest when the loan is paid back. Unlike Prosper lending, I really don't care if my loan is ever paid back.)

Allow me to start off with a couple of confessions. I haven't had a lot of interaction with true poverty. I was born into a middle class family. Even when my father died (when I was 14), I grew up in a very comfortable household. If money ever became tight, my mom was able to hide it in a way that I didn't notice. I was so oblivious to poverty in any aspect. In fact, just a couple of weeks ago I realized how clueless I was. In high school, I worked part-time job at a fast food restaurant. My co-workers never took my offer of a free ride home. I couldn't understand why then, but it occurred to me - they didn't want me to see their home.

It didn't get any better at college. I went to one of the most expensive schools in the country (I was fortunate enough to earn a free scholarship). One of the features of the university is their emphasis on a well-rounded education. As part of that initiative, I was required to take a humanities class. I choose Homeless and Poverty. At the time, I focused largely on my math and computer science skills, so this class, with so few "right" answers didn't interest me. One thing that I noted is that everyone talked about the homeless in a distant manner using terms like "them" as in, "maybe we could round 'them' and give 'them' jobs beautifying the city." It almost made the homeless out to be people from some other country. Yet for some reason it seemed natural then.

Over the last two and half years (the duration of Lazy Man and Money), I've realized that any number of circumstances can lead one to homelessness/poverty. You could be unlucky and born into it.  Some people in a third world countries simply have little opportunity. Or perhaps you lost your job through no fault of your own. (I've been there before and the way this economy is going others will know the feeling.)  Maybe you were unlucky in the gene pool and came down with a health issue that cleared out your bank accounts.  These are just a few of the possibilities.  In addition to recognizing these possibilities, I live just a few miles south of San Francisco's large homeless population.  Poverty has really started to hit home for me.

It's this very reason that I blog about money. Sure I want to help give people tips to become rich. However, I realize that as look at most of my posts, there are very few ideas to get rich.  More often it's about saving a little money here and making a little more money there.  In the fantasy world I like to live in, I hope it's enough to prevent or rescue someone from poverty someday. Together we can try to educate people to be smart with their hard-earned dollars. And to put a little of my money where my mouth is, I'll be taking Blog Action Day's challenge and opening up a Kiva.org account. I'll be lending out a day's earnings from this website. Based on last month's earnings that would be around $70-$80. It might not sound like a lot, but in a third world country it adds up. Hopefully I'll make more this month and be able to help more people.

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Last updated on July 29, 2011.

 
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