MINNEAPOLIS (CBS) – Anyone who listens to the radio has probably heard their commercial jingle, but now a well-known charity seeking car donations is coming under fire for questionable practices.
Minnesota Attorney General Lori Swanson issued a warning Thursday about donating to Kars4Kids. She said the New Jersey-based organization overstates its charitable work and lacks important disclosures.
“I think it’s important when people donate to a charity that they know where their money is going,” Swanson told WCCO.
She said Minnesota residents donated $3 million to Kars4Kids between 2012 and 2014, but only $11,600 was spent on charitable programs for people in the state.
“Since we are headquartered in the northeast, many of our programs and recipients naturally come from this area,” a statement from Kars4Kids reads. “We believe Minnesota residents…appreciate that their generous donations to Kars4Kids help children both in and out of state.”
What people might not know is that Kars4Kids is the charitable arm of Oorah, Swanson said. She says Oorah’s mission is to promote Orthodox Judaism, mostly to New York and New Jersey children.
Kars4Kids made $87.8 million nationwide between 2012 and 2014 by selling and scrapping cars. Ninety percent of its charitable spending during that time – more than $40 million – went to Oorah, Swanson said.
The report also notes that Kars4Kids and Oorah lost roughly $9.7 million in real estate investments since 2007.
Swanson said those losses, which included an outlet mall, strip mall, hotel and condo development, were all managed by a cousin of the organizations’ president.
Kars4Kids’ advertising budget for 2015 was $17 million, CBS News reports.
“So when one makes a donation to Kars4Kids, they’re basically paying for those ads,” Daniel Borochoff, the president of CharityWatch, told the network.
CBS News also reported that Kars4Kids paid settlements to Oregon and Pennsylvania in 2009 amid accusations of misleading donors.