Report: Kars4Kids raised $3M in Minn. but spent little on kids here

Minnesota Attorney General Lori Swanson
Minnesota Attorney General Lori Swanson at a press conference July 1, 2015 in her office in St. Paul.
Alex Friedrich | MPR News file

Updated 3:52 p.m. | Posted 2:29 p.m.

Kars4Kids, the charity with the well-known radio jingle, has raised millions of dollars from Minnesotans between 2012 and 2014 but donated less than 1 percent of that to charitable programs for Minnesotans, state Attorney General Lori Swanson said Thursday.

The New Jersey-based organization that invites the public to call an 800 number to donate used cars raised $3 million from more than 5,800 Minnesota donors but only spent $11,600 between 2012 and 2014 to directly benefit Minnesotans, according to a compliance report by her office.

"Donors need accurate and straightforward information to make informed choices," Swanson said in a statement. "We hope this report sheds greater transparency on Kars4Kids, one of the nation's largest vehicle donation programs."

Swanson's office said Kars4Kids received $87.8 million nationally in proceeds from the sale and scrapping of about 160,000 vehicles donated nationwide between 2012 and 2014, but does little direct charitable work itself.

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"Instead," the agency said, "it acts as the fundraising arm of Oorah, Inc., a New Jersey charity, which shares a headquarters and staff with Kars4Kids. Kars4Kids donated more than $40 million, or over 90 percent of its actual expenditures on charitable programming, to Oorah from 2012 to 2014. The charity's mission is to promote Orthodox Judaism, primarily to New Jersey and New York children."

In March, the watchdog group Charity Watch sharply criticized Kars4Kids for not disclosing its relationship with Oorah or the limitations of its charitable programing.

"Oorah's two largest programs are summer camps and tuition assistance. Two-thirds of participants in these programs are from New York and New Jersey. Only three Minnesota children have participated in Oorah's summer camp and tuition assistance programs as of March, 2015," the Attorney General's office said.

Kars4Kids responded Thursday afternoon with a statement saying it's done nothing wrong.

"As the attorney general's report makes clear, there has never been any question of diversion of funds from the charity," the organization said. "We believe Minnesota residents understand that charity needs cross state borders and appreciate that their generous donations to Kars4Kids help children both in and out of state."

Kars4Kids added that it's talking with officials in Swanson's office "and welcome their suggestions, which we are reviewing. The donation of a vehicle incurs considerable expenses that are typically not present in a cash donation and we hope our donors are cognizant of that."