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Non-Profit Organizations and Vehicle Donation Programs

Overview

This page provides information for non-profit organizations that want to establish a vehicle donation program.
 
Use the links below to go directly to any section:
Vehicle Donation Program Guidelines
It is understandable that non-profit organizations want to maximize the value of the donation by keeping overhead costs to a minimum.  DMV has attempted to assist by giving them some options not available to other organizations or businesses.  At the same time, DMV has a responsibility to the public and the certified dealer community to protect their interests.
 
Since 1999, non-profit organizations that wish to have vehicle donation programs have had three options:
  • Be certified as a vehicle dealer;
  • Title all of the donated vehicles in the name of the non-profit organization and then consign the vehicles to a certified dealer (this includes an auction that is certified as a vehicle dealer). ORS 822.060 prohibits a certified dealer from taking a consignment from anyone who is not also a certified dealer or the owner shown on the title; or
  • Have the donor consign the vehicle to a certified dealer designated by the non-profit who would sell the vehicle then pass the proceeds from the sale to the non-profit per the written instructions of the owner. Using this option should include a written agreement between the certified dealer and the charity on how to dispose of the donated vehicles and how the certified dealer should pay the funds to the non-profit.
Note: In using the links above, you may need to scroll down to find the correct ORS reference.
 
Should the non-profit organization fail to follow the statutes, they could be charged as an uncertified dealer and fined $2,500 per vehicle sold or offered for sale.

DMV's Regulation Responsibilities
When DMV finds a non-profit organization violating these regulations, the non-profit organization must cease selling vehicles. The DMV Business Regulations Section will explain the available options and give the non-profit organization a short period of time to come into compliance or cease the vehicle donation program. If the illegal practices continue the non-profit organization could be fined up to $2,500 per vehicle sold or offered for sale.

Reasons Behind the Policy
This policy follows Oregon statute and these requirements offer important consumer and non-profit organization protections.
 
Non-profit organizations acquiring vehicles through direct donation fall under the definition of "vehicle dealer" in ORS 822.005 when the stated purpose of vehicle donation programs is to raise cash for the charity and create a tax deduction for the donor.
 
There is no exemption in ORS 822.015 that would allow a non-profit organization to operate without first being certified as a vehicle dealer.
 
Note: In using the links above, you may need to scroll down to find the correct ORS reference. 
 
When non-profit organizations act as unlicensed dealers, their lack of dealer training often results in failing to satisfy transaction requirements that protect the non-profit, the donor and the buyer of the vehicles.
 
For instance, often the vehicle title is not put in the name of the non-profit organization. In addition to making the non-profit organization an unlicensed dealer there is no record in the vehicle chain of title that the vehicle was donated to the charity. The consumer who purchased the vehicle does not know the non-profit organization was actually the seller of the vehicle.
 
As the popularity of non-profit organization's vehicle donation programs increase, incidents of disgruntled donors rise. A common occurrence is where an individual purchases a donated vehicle at an auction and the vehicle is not transferred into the purchaser’s name or the sale/transfer of interest reported to DMV. If the vehicle gets towed because the new owner gets numerous parking tickets or the vehicle breaks down and is abandoned, the prior owner (donor) is responsible for the tow bill and any fines because there is no documentation of new ownership on DMV's record.
 
In cases like this, a non-profit organization's reputation suffers, donors become dissatisfied and their interests are not fully protected.
 
There are other regulatory issues involved in vehicle sales beyond DMV requirements.  Besides bonding and insurance requirements, advertising, contracts, buyer warranty disclosures, disposal of fluids, and even washing cars are subject to government regulations at the state and federal level.

Related Information
Additional information that may be relevant includes: