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HELP US HELP A LOT OF KIDS in dire need.
By participating in our FREE Vehicle Donation Program where YOU get to help us! A major source of our financial support is from vehicle donations. In the process, you may get a great tax advantage yourself.
RebuttalBelow is our, May 30, 2000, response to Mr. Dennis Herzig, the News Director of KCAL Channel 9 in Los Angeles regarding the distorted news story about vehicle donation programs that aired on his station. Most reporting of vehicle donation programs, including a recent article in the Los Angeles Times, use the same faulty logic as Channel 9's story did. These slanted article have done serious harm to our financial well-being by discouraging potential donors. We recognize that these days the principle of "if it bleeds, it leads" controls what gets on the news and into the papers. When the reporters stab with distortion, an otherwise healthy program to have some sensationalized blood to sell the story, they have crossed the line of responsible journalism. The real pity is that they missed the real story, that of a wonderful organization that has been kept alive and well due to the monies generated by its vehicle donation program.
There are two problems with your reporting. The first is that you compare the gross revenues to the amount of monies the agencies receive. This type of analysis will always make the fundraising appear as a rip-off of the contributorsí good intentions and a short changing of what the organizations should have received. This is because the cost of promoting the fundraising has been left out of the equation. It is the agencies percentage of the NET profits, not the gross, which is important.†
The second problem with your analysis is that you are treating vehicle donation programs as if they were fund raising ventures where money was donated to an event, like a walk-a-thon or a concert, rather than as a recycling or remanufacturing operation, which they truly are.† In the case of vehicle donation programs, what is being donated are vehicle that, as they sit in the doneesí driveways have little monetary value.† That is usually why they are being donated for a tax write-off, rather than being sold by the owner. Much has to be done before these otherwise unsellable vehicles can be turned into cash.
Expensive, paid television and radio advertising is needed to generate the donations. All the donated vehicles then need to be towed. Over half of the vehicles that are processed by the O.N.N.E. Corp. are not fit for resale and are sold to the junkyards, at very little profit. Of the other half, most need to be worked on before they are fit to be sold. There is, finally, the administrative and operating costs of running such an extensive recycling operation.† All of these expenses are left out of an analysis that compares the gross proceeds to what the agencies receive. When you accurately reported that, on the average, the agencies get about 15% of the gross, you led the viewers to erroneously assume that the remaining 85% goes into the pockets of the owners of the O.N.N.E. Corp. The truth is that when you look at the NET profits, after the above-mentioned costs of taking an unsellable car in the doneeís driveway and turning it into cash, the agencies receive 98% of the revenues.† This compares quite favorably with the accepted guidelines for money raising events, such as concerts, where 65% of the money collected going to the benefiting organization is considered quite acceptable.
I would also like to respond to the comments of Mr. Craig Thompson of Aids Project LA who said that they signed on to a new company that is giving them 35% of the gross. What he didnít say is that that company does not do any advertising for its charities and it does not accept any cars older than 1986 and all cars have to be in running order and ready to sell. Their only expense is for a tow truck and the car lot. They can certainly afford to give APLA 35% and still make a killing. Even with advertising, (which accounts for over 45% of the ONNE Corpís expenses) less than 20% of the cars donated to APLA in their last year with the ONNE Corp were of this high quality. I wonder how, without paying for advertising, APLA is planning to get people to donate enough of these classy cars for them to raise at least the $300,000 that the ONNE Corp. generated for them last year.† I am looking forward to your follow up interview with them a year from now.
I think it is unconscionable for you to malign The O.N.N.E. Corp. and its principals in the way you did. If there ever was a group of people who deserve to do well by doing good, it is they. Unfortunately, in 1999, because of huge increases in the costs of running the business, they almost did not even make enough for their own modest salaries. My organizationís experience with them has been wonderful. When we first looked into the possibility of associating with them, their absolute honesty and meticulous paperwork impressed even the highly skeptical high-ranking law enforcement people on our Board of Directors. From the beginning, they have committed themselves to cover most of our bare minimum expenses. There have been many months where we have gotten a check that has been thousands more than we actually earned as our percentage of the car sales. We owe our existence to these angels.
Your report has done real damage to the number of vehicles donated this month. This has a direct effect on the organizationsí income. Even worse, because The O.N.N.E. Corp. has a very high fixed operating expense this unexpected lack of donated vehicles puts the entire operation and our agencies welfare in jeopardy. I hope you will do whatever it take to right this egregious wrong and restore our doneeís confidence.
Jason Wittman, MPS
Please write to Jason Wittman, the Executive Director with your comments and questions.
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