How a business mindset makes
Kars4Kids a better charity

Our Approach

To really understand Kars4Kids, you need to ignore much of what you’ve been told about charities and how they “should” operate. The public has become used to the idea that charities have to constantly ask for donations to fund the work they do on society’s behalf. And we’ve been told that charities should not spend very much to accomplish that work. As a society, we leave innovation and growth strategies - and big budgets to work with - to the business world, leaving the nonprofit sector risk-averse and hungry.

We at Kars4Kids don’t think that makes very much sense. We believe organizations doing great work for their communities should be permitted to raise money to support their programs without restrictive and out-of-touch fundraising standards. How can we expect nonprofits to accomplish their altruistic missions without allowing them the same latitude to raise funds as for-profit businesses do?

But we’re getting ahead of ourselves. Let’s back up to the beginning, shall we?

Kars4Kids was registered with the IRS as a 501(c)(3) nonprofit organization in 2000 (then as “Joy for our Youth”).  But our roots go back to the 1970s, with a big-hearted rabbi in New York helping the local families and kids in his community. As his outreach grew, so did the network of volunteers he pulled in to contribute to his endeavors. It was his son, our current CEO, who really took the organization from a grassroots community charity to a national household name operating at a scale then unimaginable. It started with neighborhood carnivals and selling popcorn, the kind of fundraising approach only an ambitious little kid would dream up. The tactics got savvier with time, but always kept that same spirit of innovation and creativity - borrowing entrepreneurial grit from the business world and putting it to work to enable life-enriching programs for youth.

It was with this ethos of always looking for new ways to create a sustainable revenue stream that we started accepting car donations in the mid-’90s.

Instead of just asking for handouts, we serve a need, making it easy to get an old vehicle picked up and turning a potential hassle into funds for children’s development.

Of course, our volunteer-written, in-house-produced, no-frills radio jingle was a pivotal part of getting Kars4Kids national recognition and millions of donations - and so we’ve kept it on the airwaves for over two decades, flying in the face of convention, because we know it works.

But also, we obsess over giving our donors an exceptional experience and doing everything we can to make the most from every donation we get. It’s our can-do attitude, frugality, and daring to think differently that got us to where we are today. And it’s what continues to drive us to keep our operations in-house so we can keep the costs down and the service excellent.

We are, in a word, different. And in a good way.

But here’s the thing - and why the typical charity evaluator gets it wrong.

The organizations that evaluate and rate charities aren’t able, within their algorithms, to wrap their heads around an organization that doesn’t conform to the traditional nonprofit model of soliciting donations to fund their work.  They get fixated on metrics like fundraising expenses and fundraising efficiency, which are of course important but hardly provide the full picture.

Not many people realize this, but most car-donation organizations outsource the process.  By doing that, they shed an operational headache – but they also shed a good chunk of the revenues.

We don’t do that.  Our in-house approach means, ironically, that we actually keep more money for the kids.  It may look less financially efficient on paper because we report the costs associated with advertising for and picking up car donations.  Almost all other charities that accept car donations report only an expense-free grant from the company to which they outsource the car donation process.

The evaluators don’t take any of this into account.

If we confined ourselves to the ratios and percentages they arbitrarily demand, we would never have been successful in the ways we have.  Together with our sister charity Oorah, we support thousands of Jewish children and families with our full suite of year-round programs – including summer camp, youth groups, school placement and tuition assistance, family retreats, and community outreach.  We offer a holistic approach to developing a generation of strong contributors to the community.

Still, we wanted an honest outside opinion on how we rate as a charity. We asked Doug White, an independent nonprofit expert, to do his own review of Kars4Kids. Watch him share his unbiased take.
Watch

We are proud of what we are accomplishing.

You see, the millions of dollars we raise today generate dreams and provide experiences for children they likely would not otherwise have.

Questions & Answers

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• 1. What is the process Kars4Kids takes to turn a car into funds for charity?
  
  The car donation process is very simple for donors: they provide basic details about the vehicle, schedule a pickup and receive a tax-deductible receipt for the value of the car. Kars4Kids does all the work behind the scenes to ensure the maximum value from the vehicle reaches the charity programs.
  
  Donated cars are assessed to determine the most profitable sale option – typically ending up either at dealer-only auto auctions or scrapyards. Kars4Kids contracts with local towing vendors to handle the pickup, with in-house representatives facilitating the transfer. In situations where the title is missing, affecting the saleability of the car, Kars4Kids’ in-house team works with the donor to procure a replacement.
  
  The cars are rarely used directly in the running of programs, though occasionally that will happen (such as a van used for volunteer transportation). Instead, the proceeds from their sales directly fund everything the charity does for kids, from animals in camp to tuition assistance to holiday packages and events.
  
  

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• 2. Is Kars4Kids a financially efficient charity?
  
  Yes, we are. Thanks for asking!
  
  There’s an inherent inefficiency built into the car donation model, in that we have to convert an illiquid asset into monetary funds (i.e., sell the cars or real estate that is donated.) We’ve elaborated above on our approach to fundraising and why we solicit vehicle and property donations rather than cash, so we won’t get into that here. But taking that extra layer in the process into account, we are very mindful of our expenses and scrupulously careful to keep them as low as possible without sacrificing performance.
  
  Charity evaluators, however, don’t take this difference from typical charity fundraising models into account in their ratings of Kars4Kids. What we have yet to see at charity evaluators is a side-by-side, apples-to-apples comparison of car-donation charities.  Many types of charities accept car donations, but they also raise money in other, more direct ways.  At Kars4Kids, the primary way we raise money is through car donations. Of other charities that accept used-car donations, those that are rated more efficiently than Kars4Kids employ other fundraising methods.  Indeed, their main method of raising money is not by soliciting donations of used cars.  For them, soliciting cars is just one more tool, and usually a comparatively minor one, in their overall development operation.  If we could segregate the used-car solicitation process from their other fundraising efforts, or if there were a comparison of charities similar to Kars4Kids, we would undoubtedly see even less efficiency among those other charities. 
  
  To further complicate matters, most charities that accept car donations do so through a third-party partner, such as Advanced Remarketing Services, whose Car Donation Wizard program processes the car donations of organizations like American Cancer Society and March of Dimes. The charities who benefit from these donations receive a percentage of the proceeds from the vehicle’s sale from the processor they work with in the form of an expense-free grant they report on their financial filings. By contrast, Kars4Kids runs its own car donation program, without a cut going to a third-party processor and being vigilant to keep costs down throughout the process, but reports all the advertising and operational costs associated with the donations on its financials, making it seemingly less efficient in contrast to those charities.
  
  

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• 3. Kars4Kids supports Oorah, another nonprofit. What is the relationship between the two charities?
  
  Kars4Kids and Oorah are two separate 501(c)(3) nonprofit organizations recognized by and in good standing with the Internal Revenue Service and the state of New Jersey, where both charities are located.  Each board is independent and separate from the other, although one person, Eli Mintz, currently serves on both boards of directors.
  
  Almost all of the money that Kars4Kids raises is donated to Oorah, which provides year-round programs for Jewish children and families. The most visible of Oorah’s activities is its summer camps, but it does much more: after-school programs, Torah study and mentor partnerships, school placement and tuition assistance, and community programs. You can find links to detailed descriptions of these programs here.
  
  In 2021 Kars4Kids provided approximately $48 million for Oorah’s charitable programs.
  
  

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• 4. Why do you advertise so much?
  
  The function of our advertising is primarily to heighten awareness of and encourage donations to our vehicle and real estate donation programs. The amount of our advertising is determined by our in-house cost-benefit analyses.  As with any business – and in this area of operations, all charities act the same as businesses – we want to spend as little as possible but to also have the highest yields as possible.  If we advertised more, we would waste money.  If we advertised less, we would not raise as much money.  It's both an art and a science to determine just the right amount to allocate to advertising.
  
  The overriding objective is to provide as much as possible to accomplish our charitable goals while not spending too much money.     
  

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• 5. Why don’t you explain in the advertisements where the funds go?
  
  The ads remind people who want to dispose of their car that donating it to Kars4Kids is the best way to do that. We advertise that we provide for quick and easy pick-up of car donations because that’s precisely what we do. And that is all we ask of the ads.
  
  There’s a procedural difference between Kars4Kids and other charities. Our research tells us that our charitable cause, while a contributing factor, is not the primary motivation in the decision to donate a car. The benefits of donating – the convenience and ease of dispensing with a car and obtaining a potential tax deduction – are, overwhelmingly, more significant considerations.
  
  Since we raise money through car donations, our first contact with a donor (the advertisement) is more transactionally than charitably driven. At this point in our communications, our messaging revolves solely around the benefits of the service we provide, which is top of mind for potential donors.
  
  We process car donations well and efficiently, perhaps more so than any other car donation charity in the country.
  
  But then, after the first contact, a donor can immediately learn where the net proceeds are going. In order to execute the transaction, either on the phone or on our website, donors are informed of our charitable purpose: providing educational, youth development and mentoring opportunities to Jewish children through summer camps, tuition assistance, and year-round youth groups, programs and events. Our mission is not a secret – we “help thousands of children develop into productive members of the community” – and potential donors have ample opportunity to learn about it. Our charitable work is carefully explained when people call and it is broadly explained on our home page, which has links to more detailed information.
  
  

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• 6. I heard that Kars4Kids got in trouble a few years ago with some states’ attorneys general. What was that about?
  
  In 2017 the Office of the Attorney General of the State of Minnesota (OAG) conducted a review of Kars4Kids. It was an involved process, with extensive conversations covering detailed questions about aspects of our advertising and financial filings. Our professional, independent auditing firm followed Generally Accepted Accounting Principles (GAAP) in our reporting of certain expenses, which the OAG questioned. Ultimately, the OAG produced a lengthy report with their findings, with no legal action taken or suggested. (All things considered, this means our books and operations were scoured, with very little to take issue with.)
  
  Media coverage of the report focused heavily on the finding that Kars4Kids raised $3 million from Minnesota car donors from 2012 to 2014 while spending $11,600 on charitable programs for Minnesota residents in that time frame. The inference in the media reports was that this was a bad thing. We disagree. After all, kids are kids, regardless of what state they live in. When donating to Kars4Kids, more of the proceeds of a car donation will reach actual charity work, real kids and families, than any other car donation option in the country. The fact that the majority of those recipients don’t live in Minnesota (the largest concentration is in the region Kars4Kids was founded, the Northeast) is immaterial to most donors, as evidenced by the fact that few donors ask about this before or during the process of donating.
  
  We have great respect for former Minnesota Attorney General Lori Swanson, who oversaw the writing of the 2017 report concerning Kars4Kids, and her efforts to expose charity fraud, and, in fact, for the work of all attorneys general in the United States in their oversight of charitable activity.
  
  Going back as far as 2008 and 2009 (well over a decade ago!), issues resolved with the Attorneys General of Oregon and Pennsylvania have been mischaracterized by such sites as Charity Watch as fines and penalties. In fact, Kars4Kids voluntarily agreed to specific changes in its advertising in these two states to satisfy concerns raised with their respective OAGs.
  
  

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• 7. Can you please change your jingle?!
  
  No.
  (Not as long as it remains effective at bringing us donations.)