Chuck,
You answered my question as to why someone would use AIM for their boat
donation, Thanks,


wrote in message
oups.com...

Starbucker wrote:
Chuck,
Many legitimate charities accept car and boat donations
http://www.donateacar.com/charities.html, why would someone want to use
the
AIMS Charity to donate their boat verses the ones listed on this web
site.


Primarily because of the structure of the proposal itself. Any number
of
organizations will take almost anything of value you'd care to give
them free of charge. Very few organizations will enter into an IRS
approved "bargain sale".

Example: Joe Doaks is trying to sell a boat. He owes $25,000 on a
marine mortgage secured by the boat, and every month the boat remains
unsold costs him about $1000 in moorage, interest, insurance,
maintenance, etc. If he calls "lighthouse for the blind" or something
of that sort, they will be happy to accept title to his boat- after
he's borrowed $25k against his house or pulled the money out of savings
to clear the title. Let's say that an independent appraiser, (marine
surveyor), has inspected Joe's boat and written an expert opinion that
the vessel is worth $125,000. After shelling out the $25k needed to
clear the title, Joe will get a tax write-off of an amount equal to the
fair market value of the vessel. If Joe was in the old 40% bracket,
that tax write off would save him $50,000 in taxes. ( There were
limitations on the amount that could be deducted in any one year, based
upon a percentage of AGI. If Joe couldn't use the entire $50k in one
year, he could carry it forward).

Under a "bargain sale", Joe surrenders his boat for a combination of
cash and
charitable donation. In the above example, an organization might offer
Joe $25,000 in cash for the title to his boat (enough to clear up the
loan without taking out a mortgage on his house or depleting his
savings). Based on the expert opinion of an independent appraiser, Joe
could take a tax write-off of
the fair market value of the vessel less the bargain sale cash.
$125,000 FMV less $25,000 bargain sale cash would leave a tax write-off
of $100,000. In the old 40% bracket, that would leave Joe with a
$40,000 tax savings. Joe effectively realizes $65,000 under the bargain
sale approach ($40k tax savings plus $25k cash) rather than $50,000
under the "straight give-away" approach, and isn't stuck paying for a
boat that is long gone.



You seem like someone who likes to help the less fortunate, don't you try
to
find the most efficient charity before contributing your time, talent or
money to the charity?

Contribute?? I was a paid fund raiser. It was my livlihood. I don't
remember ever applying anywhere for sainthood. :-) The organization
got a highly effective fundraiser in exchange for a very attractive
income. (15% X 1 boat a week average: do the math- but there were a few
pretty cheap boats in the mix here and there). I took a pretty fair
chunk of cash out of that arrangement, but for every 15 cents I took
out there was 85 cents left over. I saw the local branch of the
organization hire three full-time school teachers to present programs
in public and private schools. I watched it fund and staff a boat-based
summer camp for school kids. I actually participated in some programs,
chiefly by skippering some boatloads of disadvantaged kids on
educational cruises around Lake Union and Lake Washington. Etc, etc.
The honest answer is I can't tell you how much of the 85-cents I passed
through to the organization was used for programs vs. overhead, and for
reasons explained up the thread.

Exactly because the individual deals were as lucrative as they were,
there was no need to misrepresent the program to people. If we got five
leads a week and four fully informed prospects said "no thanks, it's
not for me at this time" there was still more than enough money to be
made doing business with the one fully informed prospect who felt it
was time to just get rid of that darned old boat. :-)

Only people with very little talent for sales need to lie and cheat
their way to a deal. Good salespeople can operate honestly, and a sharp
and ethical salesperson will always make a lot more money than a
crooked one...(the closing ratio is that much higher).


Did AIMS offer a higher value, and thus a higher tax write off than the
larger charities?



No. We didn't offer or suggest any value at all. Values were determined
by independent marine surveyors, and those same surveys (paid for by
the potential donors) could be used to donate a boat to any
organization of the donor's choice. We had some cases where a donor's
boat wouldn't survey as highly as the donor hoped it would and a
transaction would fall apart as a result. We had other cases where the
potential donor did wind up using the survey value to donate to another
organization. Fine, no problem. There was enough money in the deals
that did go through to carry on rather nicely.






wrote in message
oups.com...

Starbucker wrote:
Chuck,

I have always considered any charity that spends less than 10% of it's
contributions on administration and fund raising, as an extremely
reputable
and efficient charity. My favorite charity spends 3% on admin and
fund
raising.

The BBB uses 35% for admin and fund raising as their criteria for
evaluating
reputable charities. The AIMS is not listed on www.Give.org ,
http://www.charitywatch.org/, or http://www.charitynavigator.org/.
This
is
normally a red flag.

What percent of AIM's contributions are used for admin and fund
raising?
This info was not available on AIMS web site, which is another red
flag
to
look at the charity closely before contributing.

I never made any representations as to the specific percentages spent
for programs. I refered those inquiries to our accounting office. Very
few of the donors even gave a rats patoot about the nature of the org's
programs, they were all primarily interested in dumping their boat for
a combinatin of a little cash and a tax writeoff. (IRS approved
"bargain sale")

Less was spent on programs than could have been, but I know of a couple
of similar programs where almost *nothing* was spent on programs.
Enough was spent to qualify as a 501C3.
I am sure the organization spent far more than some on administration
and fund raising
than some groups and far less than others. One of the accounting
problems you run into with a "boat donation" organization is the very
high and continuing cost of maintaining donated vessels and moorage,
etc. There are more costs than are involved with a group that simply
deposits checks into a bank account and then writes smaller checks in
return. I can tell you that the overhead for my services was in the 15%
bracket, (of the boats that I personally received on donation and
resold).

Another challenge is that the percentage would vary from time to time.
When I joined up with this group in Seattle, they were having a real
tough go of it. Very few people were donating boats, and just paying
the office rent and keeping the lights turned on probably used up
something in the high double digits of the money actually coming in.
During the time I was there the number of donations just happened to go
up significantly, (we received an average of one boat per week) and
programs expanded as a result.

The organization may not appear on your approved charities list for a
number or reasons. One of which is that it, and most boat donation
programs, are now out of business due to a change in the tax law. And,
it may never have been run efficiently enough to qualify in the first
place.
We were on some approved lists when I was there in the late 90's, but I
can't remember which lists those were.

Your post is a perfect example. If you had approached me in the late
90's as a prospective boat donor with the concerns you expressed here,
I would have told you; "We do a significant amount funding and
charitable work. Our accounting office can give you more specific
details. Most of our donors are more motivated by the tax benefits than
by the exact nature of the work the Institute does, and the tax
benefits do not change based upon the administrative overhead of any
specific agency or organization. If after checking with your attorney
or tax advisor you want to make a donation but you are not satisfied
with the results of your research into our programs and would prefer to
donate elsewhere, that would be your option. I'm happy to explain who
we are and how the program works- you need to decide if it's the right
thing for you to do, or not. You can always sell your boat directly and
give the cash to whatever group you like." ((Of course 90% of the
boats we received on donations were from sellers who had despaired of
the sales process and just wanted to be "rid" of the boat, so few
thought that continuing a private sales process and donating the cash
was a good idea.))