California Sues Car Charities Over Administrative Costs
LOS ANGELES (AP) — The state attorney general and county prosecutors on Tuesday sued two Southern California car donation charities that they say lie to donors about how much goes to charitable causes.
Ventura-based Cars 4 Causes reported donating $15.9 million from 2009 through 2014, but Attorney General Kamala Harris said only $5.4 million went to charity. The company's own accounting shows it owes about $2 million to thousands of charities, money that the lawsuit describes as a "diversion of charitable assets."
The suit says the Cars 4 Causes advertised itself as "An Actual Charity. Not an Expensive Fundraiser," among other misleading promotions, while 87 percent of donations went to salaries, advertising and other administrative costs.
In a separate lawsuit, Harris alleges that 97 percent of donations to Los Angeles-based People's Choice Charities went to towing, car repairs, advertising and other costs. She says the charity donated only a quarter of what it claimed from 2007 to 2012.
"No comment, because we just found out," said Gary Stone, the charity's president.
The lawsuits were filed as Harris warned consumers to check charities before they donate.
"These charities exploited the goodwill of generous donors by misrepresenting their charitable programs, misappropriating donations and accruing excessive administrative costs," she said in a statement.
Car donation charities are supposed to sell the vehicles, deduct their costs and send the remainder to charity. Harris urged consumers to instead donate directly to the charitable organization. If a car donation charity is used, she said donors should call the designated beneficiary to make sure it received the money.
A report on the attorney general's website includes statistics for how much money raised by commercial fundraisers in California went to charities in 2014. It shows that thrift stores and car donation charities provided significantly less donations overall than other charities.
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