Kars4Kids is questioned by charity watchdogs

The catchy jingle advertising Kars4Kids charity began blanketing radio airwaves across the Twin Cities around Thanksgiving. The ditty ends with: "We're a recognized 501(c)(3) charity organization, so you'll receive a maximum tax deduction."

The ad doesn't say that Kars4Kids is recognized for other reasons, such as for failing to disclose the beneficiaries of its car donations.

Kars4Kids is well known to attorneys general in Oregon and Pennsylvania who investigated the charity for leading donors to think the charity benefited a broad group of children, not a "narrow religious purpose."

Kars4Kids, they learned, is the primary funder of a New Jersey organization called Oorah Inc. that provides religious-based services to Orthodox Jewish children. Kars4Kids paid $65,000 in fines in each state in 2009.

Oregon also found that Kars4Kids failed to disclose that its "free" vacation vouchers offered at the time recruited people for a timeshare and contained hidden costs. Meanwhile, the New York attorney general investigated Kars4Kids last year as part of a broader probe into solicitation and spending practices of car donation charities.

Kars4Kids insists it's not trying to mislead anyone. There just isn't space in its advertisements to explain where the donations are headed, spokesman Rabbi Eli Mintz said.

"You have a 60-second spot: You don't have time to inform people of your mission," said Mintz, who also is the CEO of Oorah. "People can go to our website" to learn more, he said. Mintz said he is frustrated by the negative attention drawn to Kars4Kids, because no one has found financial improprieties or shown that it's a front for a sham charity, which is far more serious.

Although new to Minnesota this winter, Kars4Kids has been on the radar screen of national charity watchdogs. They are skeptical of the advertising that attracted roughly 70,000 car donations valued at $24 million in 2009.

"If you donate to an organization called Kars4Kids, it's a huge red flag that the money isn't going to an organization with that name," said Lindsey Nichols, spokesperson for Guidestar, a national charity information websites.

"Plus, some people may want to donate to a secular group or one from a different religion," added Daniel Borochoff, president of Charity Watch, a Chicago-based nonprofit watchdog. "I guess they figure they wouldn't be as successful if people knew what was really going on."

Catchy jingle

Twin Cities commuters driving home this holiday season, with radios tuned to stations such as WCCO or KFAN, can't help but catch the jingle. The ditty typically starts with a voice singing "1 877 kars for kids. K-A-R- S kars for kids. 1 877 kars for kids. Donate your car today."

The jingle has been played so often across the country that it's somewhat of an Internet sensation. Listeners, mostly those who can't shake it from their heads, have posted snarky comments online as well as video clips on YouTube.

The jingle hit the Minnesota market this winter, advertising a service that is attractive to many. A free tow for a junked car. Fast pickup. A vacation voucher. And a tax deduction, which is on donors' minds this time of the year, Borochoff said.

The formula works. Kars4Kids' revenue soared from $5.6 million in 2005 to $24.6 million in 2009, tax returns say.

But donors curious about what they are funding need to do some digging.

Click on www.kars4kids.org and learn that it has served 5,130 children with "11 unique programs." But nowhere on the home page does it say who these children are.

Only by drilling down will donors learn "Your car donation to Kars4Kids will benefit Joy for Our Youth, an organization dedicated to addressing the educational, material, and emotional needs of disadvantaged Jewish children and their families."

Joy for Our Youth, it turns out, is the legal entity behind Kars4Kids. It has its own website, which requires donors to do more digging to find the connection to Oorah, which is simply described as "a national nonprofit organization."

Oorah and Joy for Our Youth have the same address.

"It shouldn't be that complicated," said Ken Berger, president of Charity Navigator, an online charity rating system that has posted a "donor advisory" warning next to its Kars4Kids link. "The more complicated it is, the greater the likelihood that things get buried. For example, if there is some kind of misuse of funds, it's harder to follow the trail."

Diluted donations

Another problem is donation dollars get diluted as they wind through charities, Borochoff said.

For example, tax statements show that Joy for Our Youth raised $24 million in 2009, spending $7 million on advertising and $12.7 million for a grant to Oorah.

Oorah, however, spent $6.5 million on its programs that year, according to tax returns. Another $3.5 million went to fundraising and administration, and $5.4 million was not disbursed.

Mintz says Kars4Kids was not trying to hide anything behind the multiple charities. Joy for Our Youth was the original name of the organization founded in 2000 to support Jewish youths. But Kars4Kids turned out to be catchier.

As for not revealing upfront that donations helped only Orthodox Jewish children, Mintz said that shouldn't matter to the public.

There are special services for African-American children, for example, and "for children of all flavors," he said. The most important thing is the charity is helping needy children, he said.

The Better Business Bureau reported in 2005 that Joy for Our Youth violated eight of its 20 standards, including those related to governance, finance and disclosures, said Bennett Weiner, who oversees the BBB's Wise Giving Alliance.

The BBB now is updating that review, said Weiner, adding, "We are carefully reviewing the language they use in their promotions."

Mintz responds that few charities meet all BBB standards. What's most important, he said, is that people know their donations are not paying for such things as high fundraising salaries.

Mintz stressed that donations to Kars4Kids support an important effort to help children who otherwise may not succeed. He's particularly proud of the hundreds of mentors who work with them. "I know we're not known there [in Minnesota] yet," Mintz said. "I ask people to learn about us."