Clunkers For Charity

The Internal Review Service's 2005 rules change limiting the write-off taxpayers can claim after donating a vehicle to charity may have helped reclaim money from those inflating the scale of their generosity, but the impact has been far greater on the nonprofits that provide important community services.

Prior to the change, donors could deduct the fair market value of their vehicle from their income taxes. Today, the amount of the deduction is determined by how much the donated vehicle raises at auction, with a minimum $500 write-off being the only guarantee.

The Loudoun County Chapter of the American Red Cross is one of several local organizations that grew to rely on the car donation program to underwrite a substantial part of its operations. When the government reduced the incentives for donations, funding for community organizations withered rapidly.

In appealing to Rep. Frank R. Wolf (R-VA-10) to lead a Congressional review of the tax rules, the Loudoun Red Cross, in one sense, is asking Congress to assess the value it places on community charities. Was a program that was successful in creating incentives for residents to contribute more to charity-in this case one with federally mandated duties but without federal funding-worth providing a little more tax relief?

There are a number of organizations in our community, and in many others across the nation, that believe the trade-off was good public policy. If giving a few more junkers to charity helps strengthen the organizations called upon to help those in need, it may very well be a valuable trade-off.