Popular 'clunkers' program hurts some charities

CHICAGO — Vehicles already were lined up for one of the weekly auto auctions benefiting Texans Can, a charity that helps at-risk teenagers and their families, when prospective donors started to call, saying they had changed their minds.

"They said they went ahead and traded it in for the 'cash-for-clunkers' program," said Cheryl Rios, vice president of the Dallas-based charity that serves as many as 6,000 students. She estimates Texas Can already has lost $75,000 to the federal program.

While "cash-for-clunkers" has been a huge hit with car buyers looking to snap up rebates of up to $4,500 for trading in gas-guzzlers for new fuel-efficient cars, some charities that rely on vehicle donations for funding say they're receiving fewer cars and trucks.

Others, though, call the program a boon for prompting awareness and activity in an economically distressed market.

Mike Muzzi feared the clunkers program would be bad news for the Good News Garage, an affiliate of Lutheran Social Services of New England. But Muzzi, Vermont director of the program that fixes up donated cars and provides them at low cost to struggling families, said some car dealers with potential customers who don't meet stringent cash-for-clunkers requirements have sent business Muzzi's way.

"There's no straight line we can draw between cash-for-clunkers and an increase in donations," Muzzi said. "But we are experiencing an increase in donations. Last year was a record year for us, and this year is on track to do the same."

Many charity operators and economic observers say it's too soon to determine how the clunkers program will ultimately affect giving.

"It is logical that many charities would be hurt," said John List, an economics professor at the University of Chicago who has studied fundraising. "But it's intuition right now. All the experts are guessing."

Goodwill Industries International Inc. uses the $14.5 million it gets from the 28,000 donated vehicles it receives each year to fund job training programs. While not jumping to conclusions about the effect on donations, the Rockville, Md.-based charity is "somewhat dubious about it," said its president and chief executive, Jim Gibbons.

"There's absolutely a risk of negative impact for us and others' ability to provide necessary services to people during a tough economic time," Gibbons said. "If this results in an ability to not fund programs, then we think a new program should be created."