The Popular Clunkers Program Hurts Some Charities

While the Cash for Clunkers program has been receiving a great deal of positive press in recent weeks due to the huge jump in car sales that the incentive program inspired, few have considered how this program has negatively impacted many of the nation’s nonprofit charities. For the past decade, nonprofit organizations have been relying on the donation of used cars that were on their last legs to various agencies as a means of generating much needed fundraising revenue. These agencies ranged from local public media programs such as the Public Broadcasting Service and National Public Radio to community organizations such as Goodwill and religious charities.

Previous to Cash for Clunkers, citizens were often more than happy to donate their used vehicles to these nonprofit agencies in exchange for a break on their federal income taxes. However, the financial incentives offered by Cash for Clunkers for outweigh the incentives offered by the tax write-off, so many consumers are opting to upgrade their existing used vehicle for a more fuel efficient vehicle for the Clunkers money instead of donating the vehicle to charity. While the Cash for Clunkers is definitely having an effect on the charities that were relying on these donations, it’s also worth remembering that our economy has reached the point that only an economic recovery will allow most citizens to resume actively making substantial donations to charity. Cash for Clunkers may have hurt these charities in the short term, but most of us hope that it is measures such as Clunkers that will provide the shot in the arm that our economy so desperately needs.