A provision in the Senate's Jumpstart Our Business Strength (JOBS) bill to combat foreign tariffs will be "devastating" to car donation programs, according to nonprofit groups. A final version of the JOBS bill could received congressional approval as early as today.
For years, taxpayers have donated cars to their favorite charities, then wrote off a deduction for the "fair market value." The charities auctioned the car for whatever they could get and put the money into their programs.
But under the JOBS vehicle donation provision, donors will have to wait until the charity sells the car, then write off the actual selling price. Charities fear the hassle and delay will discourage donations and burden the charities with excessive red tape.
"The bill will put more of the burden on the nonprofit to track the car and get back in touch with donors," said Jeff St. Romain, president of the Utah chapter of Volunteers of America [VOA]. "We were hoping for something reasonable."
VOA national spokesman Ron Field said "this legislation will have a devastating impact on funding for [us] and will create a huge disincentive for donating vehicles to charities."
The push for vehicle-donation reform came after a Government Accounting Office report found that some cars did not sell for anywhere close to what taxpayers claimed. Utah nonprofits estimate that as many as 80,000 Utahns have donated their cars. And Luz Lewis-Perez, spokeswoman for the Utah Kidney Foundation's Kidney Kars program - one of the most successful programs of its kind in the country - said the provision could undercut her fund raising significantly. "This would mean about 80 percent of our budget," she said.
Local nonprofit officials expressed frustration that Utah's congressional delegation - Sen. Orrin Hatch in particular - could not soften the provision when a House-Senate conference committee approved the overall JOBS bill on Wednesday.
Hatch said Thursday he opposed the charitable auto donation provision because of its negative impact on charitable organizations. "But others in the conference were dead-set against any changes because they are convinced there is abuse going on and the provision is necessary to protect the taxpayers, he said.
Lewis-Perez figures Kidney Kars still will receive three-fourths of the vehicles it did before, largely because "it's still free pickup on a car that doesn't run."
Unfortunately, she added, the charity will lose newer, more valuable cars on which the foundation makes most of its money. Those donors will probably trade in vehicles rather than donate.
"It's just too bad that money that could have gone to kidney patients will go to car dealers," Lewis-Perez added.
"I didn't think we lived in that kind of a country."