California Attorney General Kamala Harris filed civil lawsuits Tuesday seeking the shutdown of two Los Angeles-area nonprofits that solicit car donations, claiming they illegally profit from the practice, reports the Los Angeles Times.
The suits, filed in cooperation with local prosecutors, allege that Cars 4 Causes and People’s Choice Charities keep most of the millions of dollars they raised from vehicles donated to support veterans, the homeless, and other causes. The groups are also accused of significantly underreporting how much they passed on to partner charities in federal tax filings. Leaders of Cars 4 Causes and People's Choice Charities could not be reached Tuesday or declined to comment, the Times said.
In a report issued Tuesday, the attorney general's office said California car-donation groups in general spend nearly two-thirds of their revenue on staff salaries and other administrative costs. More than 360 groups statewide solicit vehicle gifts and raised $23.5 million last year, primarily through selling the cars. Minnesota's attorney general has also targeted charity car donations for regulatory scrutiny.