Yeah, one car is a good gesture, but basically irrelevant to the bottom line.

But to me, the big picture is this- if they cannot sustain a profit using their current business model, then their giving will go to ZERO when they have to close the doors. It needs to be more modest, IMO, because they are essentially leveraging the livelihoods of their loyal employees.

Frankly, in the US, I think we over-give "stuff," and under-give time and effort. The latter is often more appreciated. Who cares if you give 100 chainsaws to cut a neighborhood open after a tornado, if there are only 10 guys to use them?

 

If GM can write off the whole price, then i can see it. However if they can only write off MSRP of the car, etc. then it's not so good. I'm not well enough versed in tax laws to say for sure.

 

What a great point!
I personally get tired of being hit by every entity to "give money"... via check, debit card, or checkbox. My alumni contribution forms seem to multiply like rabbits every year. ASME wants you to give $100 just because. United Way pressures you at work. Red Cross. Etc, Etc.

This might be a GREAT time for the likes of Ford and GM to even do a little advertising to that end as well.
Start having some of these people who are sitting in job banks and such perform community service to get their paychecks.
Put T-shirts on their backs that say "I am here because I care... and so does (Ford or GM or Dodge)".
To see folks feeding the indigent, doing lawn care, cleaning parks and roadways, painting public equipment, etc with a company logo on their backs would get noticed.

I had never even thought of something like that before.

 

A bit of a tangent, but I'm not sure people would be so willing to pay these exorbitant prices for the first [ZR1 / Challenger / GT500 / insert car here] if the money were not going to charity. I imagine they take a big tax write-off for a charitable donation (I'd assume equal to the difference between MSRP and the total amount they bid for the car).

I'm no tax expert, but that's how I assume it works. That's not to say that people wouldn't pay some big bucks to have the "first," I just don't know if it would get as crazy big as it gets right now.

On the other hand, I'm thinking as I type, people do that crap with the Barrett-Jackson auctions all the time. It's almost like some kind of sick bragging right to be the guy who spent x.x million on some rare car. Maybe the "first" of a hot car would draw that kind of attention even if not tied to a charity. So I guess I've potentially voided my original point, and thus have made this post a big failure.

 

Actually - no. Only 1 entity can claim that donation as a taxable credit, and that is usualy the one donating the item [sic] car. If a guy pays $1-million to Barrett-Jackson, he can not claim it as tax-deductible. If Barrett-Jackson gives the money to GM (or Ford or Shelby or Dodge) for the vehicle, that is not tax-deductible. When they give the money to a charitable organization, THAT is where the tax deduction can take place.

You can be crafty and set-up different ways of deciding exactly who gives the money to the charity, but it will only be tax-free for that 1 transaction. All of the other transactions will be taxed accordingly. I'm sure lawyers and accountants have great meetings deciding the best way to do it too!

For the most part, the guys buying these cars are very well-off, and are playing anyway. They get satisfaction in getting the rare item they can gloat about, and knowing that the exorbitant amount of money they spent is going to a good cause, but that's about it.

And now that I think about it - I don't think you can even consider any "purchase" as a charitable "gift". If you are exchanging money for a good or commodity, that can not be considered a gift anyways, making it unqualified to be a charitable donation.

Maybe we have a CPA or legal expert on the board who can answer in more detail and fact?

 

That's why I speculated the deduction would be for the difference. I would assume that if the event is set up as a charity, perhaps there is a way that GM gets credit for "donating" the value of a ZR1. Say, $100k. If some clown pays $1M for that car, I would hope he can claim a charitable deduction for the $900k (or some other fraction of the total price paid) that went to the charity. He did exchange money for a good (the car), but clearly most of the money was for the charity (as a ZR1 only costs ~$100k to buy). But I don't know if that is how it works or not. Keep in mind I'm talking specifically about those high profile cases where the auction is set up between GM and a charity to directly benefit the charity, not a general auction for any old car.

When I say people "do that crap with the Barrett-Jackson auctions all the time," I meant the practice of overpaying for a car in general (witness six figure 'Cudas, '69 Camaros, etc.). I wasn't implying that those sorts of auctions would be deductible in any sense. (Re-reading it when you quoted me, I see I wasn't very clear with the start of that last paragraph). But in the cases where GM / Ford / whoever lines up with a legit charity, I would have to think that the buyer of the rare car gets to deduct something for their gift. The automaker might get to take a deduction too.

I'm just speculating, though.

 

Wonder if Exxon-obil is planning to give away some money to charity... since they made $11-billion in profits during 08Q2?

Hmmm....

 

I highly doubt that. Things would be much different if I were president.

 

You have my attention... how so?
Would you legislate philanthropy?

 

This is hardly a new discussion; it has in fact been discussed by me over two years ago and at great length and in multiple threads at that.

You might want to look here for more It is also a pointless discussion – there are far to many people who won’t care about any numbers presented because they assume that GM or Ford only give money for altruistic reasons and foreign nameplates only do so for the “good will” effect…facts never work well on a closed mind.

As was mentioned, Nissan gave a $1M to the local community a few days ago when they opened their new headquarters…the Nissan plant near Nashville donates over a $1M/year to United Way, during Katrina, as was pointed out by me at the time, Nissan gave $1M to Habitat for Humanity specifically for their rebuilding efforts after Katrina and several HFH houses were built by Nissan employees in Tennessee this year.

I suspect all of the transplant nameplates do very well by the communities they operate in as well as the U.S. as a whole.

 

http://blog.mlive.com/kzgazette/2008..._to_detro.html

http://world.honda.com/news/2005/pri...nekatrina.html

http://corporate.honda.com/america/p...scal_year_2007

http://corporate.honda.com/america/p...ty_involvement

 

How would you feel if Chevy donated a lot of money to China's charities (if they even allow them)? They do a lot of business over there. I'm sure the feeling wouldn't be the same.