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I would like to thank you for your assistance and guidance in setting up the KPBS Vehicle Donation Program. As you know, it has succeeded beyond anyone's expectations.

—KPBS, San Diego

Funding Your Charity

By Rick Watkins
May 23, 2007

Welcome to Charitable Auto Resources series "Funding Your Charity". In this series of articles, we explore everything pertinent to funding non-profits and charities. Our goal is to arm you with the absolute best information about funding methods, with the hope that you will consider allowing us to serve as your donation processing company.

The first in our series will cover types of donations. While most folks considering giving think of direct cash donations to their favorite charity, the range of items and services that can be donated is truly quite large, and the list keeps growing. Of course, each type of item that can be donated carries its own unique challenges, but that's a subject for later articles. Here we give a representative list of the types of things that can be donated, and a little background information about each one.

Before we list common donation types, here are a few considerations that generally apply to all types of donations:

  • Contact Information – Basic contact information about each donor should be kept, for accounting, tax, and marketing purposes.
  • Tax Regulations – Donors typically want to receive a tax deduction based on the value of their donation, so you should be familiar with federal, state, and local regulations regarding charitable donations
  • Donor Types – There are a multitude of Donor Types, from the person who throws their change into the bucket at the checkout register in the grocery store to the major corporate or philanthropic bequests. You should be familiar with them all, including how best to approach them.

Cash Donations – You would think cash donations would be quite simple (and in many ways they are), but there are still a number of issues associated with them. For example, you have an obligation to track basic contact information about each donor (for accounting, tax, and marketing purposes). You also need to be familiar with federal, state, and local regulations regarding how an individual may deduct cash donations.

Vehicle Donations – Car donations have become an accepted donation type only recently. In order to properly process car donations it's important to use a donation processing company that has excellent business processes, because the logistics of vehicle donations include towing, auctioning the vehicle for the highest price, prompt payment (5 days in California), and excellent customer service (handling donor expectations carefully is crucial).

Household Goods Donations – Most people think nothing of donating old, broken down household items to any charity that will pick them up, or at least accept them. But state and federal rules are constantly changing with regard to how to dispose of common household items, and in some states a charity can actually lose money if it accepts the wrong types of goods.

Donations from Marketing – Your Website can generate income from marketing activities, for example by displaying ads from online advertisers. But it's important to know how to sign up for affiliate or advertising programs, how to incorporate ads into your Website, and how to ensure that the income from them is treated as a donation, not as simply business income. And tracking and maintaining the ad programs is an art in itself.

In subsequent articles we'll examine in depth each donation type, the potential rewards, the pitfalls, the regulatory landscape, and how to get the most out of each type with the least risk.