Donate for a Cause - guarantee program??

[Katrinka]

When I looked at the "information to start your donation" page on their website, there were 2 options. No Cost (donation dependent upon resale), and another one Guaranteed within 8 weeks (for a cost of $1,299). It says that they will pay up to $300 is associated costs, and anything above that is the seller's responsibility.

Does anyone have any experience with this? I have been lead to believe that this organization IS legitimate. I would feel better knowing that the proceeds went to a charity, but how can they guarantee the process to be completed within 8 weeks?

 

[Kozman]

Probably because you have already paid the up front fee and if they sell it for $1 they have fulfilled the promise. And? Who does the closing? Why can't they tell you up front how much the closing will cost? What if they come back to you and say the closing is $800? They just made another $500 (for charity)?

 

[theo]

The "guaranty" is NOT that of a sale to a third party...

When I looked at the "information to start your donation" page on their website, there were 2 options. No Cost (donation dependent upon resale), and another one Guaranteed within 8 weeks (for a cost of $1,299). It says that they will pay up to $300 is associated costs, and anything above that is the seller's responsibility.

Does anyone have any experience with this? I have been lead to believe that this organization IS legitimate. I would feel better knowing that the proceeds went to a charity, but how can they guarantee the process to be completed within 8 weeks?

DFAC can easily guarantee a transfer (i.e., not necessarily an actual sale to a third party) within 8 weeks, simply because that closing can / will be handled within the same office (Resort Closings Inc, Bozeman, Montana). They presumably just transfer title to themselves (and then promptly attempt to sell it off).
Bear in mind that both of these entities are owned and run by the very same people (I believe the principals' name is James Tarpey, an attorney), so it's really not a remarkable feat to complete transfer of ownership (over to themselves) within the same office within a two month time period (for $1,299, no less)....

 

[Katrinka]

Thank you for your replies. I sent them an email yesterday asking for clarification. If I do not hear back by tomorrow, I will try to telephone them.

 

[arc918]

In a related note, be sure to talk with your tax person about how much (if any) of this is actually deductible. The IRS has really been cracking down on donations lately.

If you plan to deduct over $5,000 of value, you will need a formal appraisal. The IRS is very specific about who can provide this appraisal.

So if you bought your timeshare for $15K and now you are paying to give it away, the appraiser is likely to going to value it a zero. Items are generally valued at current fair market value. This is tricky stuff (but easy enough for your CPA to advise you on), so please be careful.

Signed,

A real live tax guy

 

[ajscomp]

I think its a scam

Well I tried with a premium resort back in March 09 - In Oct they told me they had it sold and were recording the deed. Now I got this in the email:

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We at Donate For A Cause have been taking timeshares for donation since 2002. Since that date we have accepted approximately 8000 timeshares and have raised over $3,000,000.00 for charity. It has been a happy marriage of timeshare owners who no longer use their timeshare and charities who need revenue to assist in the completion of their mission. This has been a smooth and beneficial relationship for the past 7 years.



When we accepted your timeshare for donation it was based on our extensive marketing information which concluded that your property was sure to sell via our typical marketing channels. Due to the current financial times things have changed. We regret to inform you that we are not able to take your donation under the terms we had originally hoped. We simply are not able to find buyers for your property unless we spend hundreds of dollars more than we had originally budgeted. We have to advertise each property longer and in more geographical locations in order to find buyers.



We have never had to do this before and we do not want you to think that we are an organization that offers donations at no cost to you and then asks you to pay. We have never had to ask our donors to assist us in paying the closing costs in the past. You have no obligation and are welcome to cancel your donation at this time at NO COST. If you wish to continue this donation we will require a payment of $899.00 so that we may offer your property for sale with a free closing. If you decide to pay this fee we will guarantee the completion of your donation or reimburse you 100%. This fee is tax deductable in addition to the tax deduction you will receive for your real estate donation.


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So to me its a scam since recording a deed means all they received money. So they lied one way or the other. And a closing only costs $399 so I'm not sure what the other $500 is for.