Local charity takes a hit from Cash For Clunkers

It's been a week since the federal "Cash for Clunkers" program came to an end. The program, which gave people up to 45-hundred dollars to trade in their old cars for shiny new rides, boosted sales at car dealerships in Houston and across the country. But it also took a noticeable bite out of groups that rely, in part, on vehicle donations to provide much-needed services. David Pitman tells us how one local non-profit was affected.
The Houston CAN Academy helps disadvantaged and troubled teenagers get another shot at earning their high school diplomas.

A significant chunk of the funding for that comes from a vehicle donation program. Last fiscal year, Houston CAN took in nearly 1,600 donated cars, which brought in close to a million dollars at auction.

Cheryl Rios is the vice-president of Houston CAN. She says in the three weeks Cash For Clunkers was in effect, her group collected about 100 fewer cars, compared to the same time last year.

"Also, we sell these cars at auctions, and they're selling for lower prices, because we're not getting those good cars that are going to the Clunkers program, so it's been a two-fold hit."


Rios says Houston CAN tried to counteract the Cash For Clunkers Program with what it called Clunkers For Kids. It targeted people whose cars didn't meet the specific criteria for a new car trade-in.

"We made sure they knew how they could donate it, that it was free to pick up, it didn't matter if it was running or not. So we still got to get the word out, and we still got to get some cars."

But Rios says the strategy didn't really blunt the impact that the federal clunkers program had on Houston CAN's bottom line.

"We're more than a hundred-thousand dollars off of our numbers in three weeks — cause it's gonna continue to hurt us for several more weeks. So that's our estimate of damage in reference to what we can give to these kids."

And Rios says that estimated 100-thousand dollar loss could grow in the weeks to come, because she still has to sell the inventory of donations that came in during the Clunkers program — cars of lesser quality that will fetch lower prices at auction.

Economic Consultant Ray Perryman says Cash For Clunkers isn't, by itself, completely to blame for the drop in revenue for organizations like Houston CAN.

"Some of it would simply be that more people are willing to donate a car in Houston when the economy's booming and the price of oil is 140 dollars a barrel than they are when the economy's suffering and the price of oil is 70 dollars a barrel."

And Perryman believes all the extra business the Clunkers program generated for Houston car dealers could, ultimately, make up for some of the charitable losses.

"Because automobile dealers are usually pretty large contributors to charities. And when they're more profitable, they tend to give more to charities. So there's even some offset in the charitable world, if you trace it down that far."


Houston CAN says it could take months to recover from the losses related to Cash For Clunkers, but it's hoping for a strong fourth-quarter, as people rush to donate their cars for a last-minute tax deduction.

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David Pitman

Local Host, Morning Edition

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