1. DEVELOPMENT OF A VEHICLE PROGRAM IN CAPE GIRARDEAU
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Researched programs around the country
Set up a 501(c)(3) to provide the donation letter
Found out that people donating vehicles to 501(c)(3) organizations need donation letters to
use the retail value, found on www.kbb.com or www.nada.com, as charitable gift, if they
itemize taxes. We estimate the value as low, medium, or high using the criteria on nada.com
and provide a letter with our 501(c)(3) number on the letter.
4. In most cases the best way to do this is to have a place for storing the vehicles and urge the
donor to leave the area blank on the Gift Affidavit form and leave the dates off of everything,
including the title. You can then put the recipient’s name on both the title and the gift affidavit
and put the current date on these forms. This allows the vehicle to be “given” directly to the
recipient at no tax cost and saves on the paperwork and hassle of putting the title in the name
of the 501(c)(3). Otherwise you have to wait for the title transfer and can pay up to $12
additional for this transfer only. However, you can do this and get a temporary license for the
recipient that will allow 30 days to transfer the title and then put it in the name of the recipient.
Then you will have to provide a Bill of Sale, in most cases, to the recipient that shows a
minimum of $100 value, pay the tax on the sale, and go through most things twice! Titles
cannot be “given” twice in a row; so you’ll need to look for the code on the title that indicates
this or call the license bureau to check on this before you take the gift. If it has already been
given, the donor can re-title it in the name of a family member and pay the cost for the
minimum value and title transfer then give it to your program and earn the retail value donation
deduction on their gift.
5. We normally give the vehicles to low-wage workers, who are being mentored, when the
mentors call with a recommendation. Mentors are normally more protective of what we offer
than we would be ourselves – mentors take this very personally as a mission! At times we
provide vehicles for people in need in the community when there are good programs
advocating for the need and verifying the need, etc. We also provide vehicles for community
programs.
6. It’s good to develop relationships with reliable mechanics to check the vehicles out as to their
road-worthiness, etc. Then you can depend on those mechanics to do a good job for you.
This develops into their wanting to do the best and save you money where they can.
Sometimes you’ll even find some local mechanics who will volunteer some work for free!
We’ve had some mechanics donate vehicles to us and offer to let us handle mechanic’s liens
on vehicles and send out all the required letters to transfer ownership to your program. Many
times these are vehicles that have been repaired but repair costs were never paid.
7. We sometimes get mechanics ordered to do community service and they have provided some
free labor, which you know is the reason a lot of vehicles are scrapped instead of repaired.
8. We require that recipients bring in their insurance certification before they are given the
vehicle. If the community could start a vehicle maintenance educational program, this would
help many people unfamiliar with taking care of a vehicle.
9. Some programs hold the titles for a certain amount of time, which we have tried to avoid.
Others ask people to pay something for every vehicle. We do ask for some repayment of
expenses in a few cases; but we don’t always receive much on this end. We’ve learned not to
do things based on anyone’s promise to repay; but base it on need and progress in moving
toward God in faith and toward successful implementation of their life plan.
10. As of 2006 an additional federal form is necessary for donation tracking – 3-part form 1098-C
11. Donors receive the 1098-C, a copy of the MO Gift Affidavit (or whatever your state DOT
requires in vehicle transfers), a letter from the 501(c)(3) with FEIN # and thanks / purpose /
value of their gift, and a copy of the title, if they wish.
12. Recipients must provide an insurance card, and then take their PAID county personal property
tax for the appropriate year or a tax waiver statement, along with a passed vehicle inspection
and the insurance card to the license bureau to transfer the title whatever fees are regulated.