The U.S Internal Revenue Service advises that starting in 2005: The rules for determining the amount that a donor may deduct for a charitable contribution of a qualified vehicle, including an automobile, with a claimed value of more than $500 changed at the beginning of 2005 as a result of the American Jobs Creation Act of 2004.
In general, that Act limits a donor's deduction to the amount of the gross proceeds from the charity's sale of the vehicle.
[4] Operating as a non-profit organization allows charities to avoid the large overheads created by profit-making car donation companies.
Vehicle donations in America are operated in a wide variety of plans, ranging from highly organized and professional-grade not-for-profit, national, or local charities to scrap yards, haulers, tow-truck companies and salvagers who establish programs that may support a charity.
[5] According to Charity Navigator, the guidance of the rating agencies concerning car donation programs, where the charity receives a flat fee for the use of their name by a third party, versus program management by a third party, there are some questionable companies who contract to use a nonprofit's agencies name and logo to raise funds and then just give them a flat fee unrelated to income or performance.