Easter was a busy time around the City Mission. Many donations started coming in, and we will be working in this season of rebirth to renew and rehabilitate the poor and needy in Buffalo. Those donations could be bigger, though, and we could help more individuals be renewed, if Congress corrects one of its own mistakes.
In 2005, Congress enacted changes in the tax code to address abuses in the vehicle donation process. By doing so, it inadvertently created a new problem by discouraging donations, causing thousands of charities to curtail services.
Congress passed a law to limit deductions to the value of the car when it was resold by the charity for any car valued at more than $500, which, in many cases, was less than what donors could have received for the vehicle had they sold it rather than donated it. Making matters worse, donors had to wait for months, until the charity could sell the vehicle, to find out what they could deduct. The process required increased record keeping on the charity's end, leading to higher costs.
Nationally, donations withered by 67 percent. Would-be donors sold rather than donated their vehicles, or simply held on to them. Nonprofits lost a large source of revenue. Ultimately, it was the individuals we serve -- the least, the last and the lost -- who suffered.
With far fewer vehicles being donated because of the tighter restrictions on deductions, and the loss in revenue that caused for the charities, many had to shut down their vehicle donation programs.
Just think. One vehicle, resold at $1,000, would provide 500 meals. Imagine what we could provide to the needy if donations increased in both number and the value of the vehicle.
Prior to 2005, an individual could deduct the fair-market value of a donated vehicle up to $5,000. Donations boomed. We at Buffalo City Mission resold the cars and earned revenue that enabled us to provide more services to Buffalo's homeless.
Unfortunately, Congress allowed a few bad apples to spoil the whole bunch.
Now, an encouraging number of members of Congress have seen the error of their ways. Legislation sponsored by the House of Representatives would raise the allowable deduction of a donated vehicle up to $2,500, regardless of the eventual resale price. The tracking requirements would remain in place to avoid fraud.
If this bill becomes law, it will reinvigorate the vehicle donation market. Donors would receive a deduction equal to the value of their vehicle and the City Mission would be able to resell it to fund the necessary services we provide.
I applaud the 242 members of the House of Representatives who have co-sponsored the legislation that will bring back the vehicle donation program in a way that will help nonprofits like the Buffalo City Mission.
The House needs to pass the bill, and then the Senate needs to follow suit.
Every day, men and women at the City Mission work hard to correct mistakes they've made in their lives. Congress has a chance to correct its own mistake. If Congress makes it easier for people to donate more vehicles, we'll be able to help more of those in need.
Stuart L. Harper is executive director of the Buffalo City Mission.