If you have a vehicle that you’d like to donate to Free To Be and your curious what the process is you’ve come to the right place. The steps outlined below will guide you though the process. Also it may be of interest to read over the information we have on possible concerns and cautions when donating a car.
If Your Vehicle is Drivable
- To begin with you will need to drop off the car at one of our drop off locations. With your title and release of lien if applicable. Sign only the front of the title, and if there was ever a lien on the vehicle they would of mailed you a Release of Lien Card (give this also with the title.)
- You will be asked to fill out a Car Donation Intake form. Please fill this form out completely. We will then perform an inspection on the vehicle.
If Your Vehicle Is Not Driveable
- Please call the offices of Free2B at 763-717-7755 to have the car towed in and arrange a pick up time.
- Someone will come to tow the vehicle. Please be prepared to give the person picking up the vehicle the signed title. Sign only the front of the title, and if there was ever a lien on the vehicle they would of mailed you a Release of Lien Card (give this also with the title.) You will be asked to fill out a Car Donation Intake form. Please fill this form out completely. You keep one copy.
What Happens When A Car Is Donated?
- The donor receives a Car Donation Intake Form that the car has been dropped off or picked up by a Free To Be representative.The vehicle title is placed in Dealer Hold (eliminating any further liability concerns).
- The donor receives a Thank You letter and official Car Donation Receipt.
- Free To Be collaborating service stations inspect the vehicle.
- Upon disposition of car, the donor receives a letter of disposition.
- The car is either 1) given to a needy family or 2) sold for parts.
- If the car is given to needy individual or sold for over $500 the donor will receive a 1098C for tax purposes and NADA report of the current value of the vehicle. Any proceeds from a sale are used to benefit the Free To Be Car Repair Clients.
IRS Publication 526. Deduction more than $500. If you donate a qualified vehicle to a qualified organization and you claim a deduction of more than $500, you can deduct the smaller of:
- The gross proceeds from the sale of the vehicle by the organization,
- The vehicle’s fair market value on the date of the contribution if the vehicle is given to a needy individual.
Drop Off Locations
Car Donation Information and Cautions
When donating your car, there is some important information to consider. The Minnesota Charities Review Council identifies seventy-five (75) charities that receive donated cars and sell them (normally at auction) and use the proceeds to fund their charity. Eleven (11) charities provide donated cars to clients, but in a survey of those clients, that is not their normal activity. There are thirty (30) charities that receive donated vehicles that they use to fulfill their mission, such as a staff vehicle or utility vehicle.
How Autos Are Used:
- Sold to Raise Funds (58 charities)
- Provided to Clients (11 charities)
- Used Within or By Organization (30 charities)
There are also organizations that appear to be non-profit organizations but are for-profit organizations that try to look like a non-profit and give a small percent of their net profit to the givers designated non-profit organization.
In conducting a survey of the organizations that provide donated cars to clients, Free to Be, Inc provides nearly as many cars to donated clients as all the others combined, because that is their mission, “Providing Car Care to Enable Independence.”
The Charities Review Council provides the following advice for car donations:
Determining Your Tax Deduction from an Auto Donation
Your tax deduction depends on how a charity uses your vehicle. Typically, the allowable deduction is limited to the amount of the car’s sale. Charities are required to provide written notification of the sale amount within 30 days. If you do not receive the acknowledgement from the charity, you will not be able to deduct the donation.
However, if the charity uses the vehicle as part of its programs, you can still deduct the fair market value. Fair market value (FMV) is the price for which the property would sell on the open market – this is not the “blue book” value. You need to take into account your car’s physical condition, mileage, and features, as well as the area used-car market.
You can only claim fair market value if you received a Form 1098C from the charity and they did not sell the vehicle. If the vehicle was sold you only claim the sold value.
The best method for determining the FMV is paying for a written appraisal from an independent, qualified appraiser prior to donating the car. This is mandatory if vehicle value is above $5,000. Even if the charity or its intermediary helps you, place a value on your contribution; your tax deduction is between you and the IRS, if you are audited you will need to prove the deduction was legitimate.
If the total deduction for your non-cash contributions is more than $500, you must fill out and file Section A of IRS Form 8283 (Non-cash Charitable Deductions). If the FMV of the donated property is more than $5,000, you must also fill out Section B (the required appraisal). For more information, check out IRS Publications 561 (Determining the Value of Donated Property) and 526 (Charitable Contributions) available on-line from the IRS website.
Form 1098C specifically asks if the car was given to a needy family by the nonprofit organization in order for the donor to be able to claim the fair market value.
The primary purpose of Free to Be, Inc. is to receive donated cars, repair them and then give them to needy families. If the car requires excessive repairs or is not suitable for a needy family, the vehicle is sold and the proceeds are used to repair other vehicles.