CharityWatch's rating of Kars 4 Kids includes the financial activities of the legal entities consolidated in its audited financial statements for the organization's fiscal year ended December 31, 2023. According to Note 1 of the consolidated audit, these include: "...the accounts of Kars 4 Kids, Inc. and its wholly owned subsidiaries Carsandmore2001 LLC, K4K LTD, Kars Resources LTD, K4K LLC, and K4K Medial LLC. Carsandmore2001 LLC sells donated vehicles outside of the organization's usual distribution channels. K4K LTD and Kars Resources LTD provide back-office services to the Organization in Israel. K4K LLC holds investments in real estate and real estate donations. K4K Media LLC is an in-house advertising agency for the Organization. All material intercompany balances and transactions have been eliminated in consolidation." |
According to the Kars4Kids 2023 tax filing (IRS Form 990, Schedule M) and audited Consolidated Statement of Activities for the year ended December 31, 2023, approximately 86.3% of Kars4Kids' reported Total Revenues in 2023 consisted of donated cars, other vehicles, boats and planes; approximately 10.1% consisted of donated real estate; and approximately 1.5% consisted of donated clothing and household goods. |
According to the Kars4Kids consolidated audit of December 31, 2023 (Note 9, Related Party Transactions): "The Organization distributed most of its grants to an affiliated nonprofit organization under common management. Total grants to related organizations during 2023 amounted to $36,120,405. Total grants from the related organizations during 2023 amounted to $1,253,187. In addition, the organizations share premises, and certain overhead costs are allocated between them based on usage."
According to the Kars 4 Kids 2023 IRS Tax Form 990, in 2023 Kars 4 Kids made a cash grant in the amount of $34,123,050, and a noncash grant of $1,365,855, to its related public charity, Oorah (tax ID#22-3746051. According to Oorah's IRS tax Form 990 of the same year, Oorah's mission is stated as follows:
"Oorah was established as a Jewish outreach organization for the purpose of imparting education, values, and traditions, as well as guidance and support, to children who lack access to these fundamentals. Oorah takes a holistic approach to its mission, utilizing Jewish tradition to enhance every aspect of children's lives, the majority of whom are at risk due to divorce, loss of parent, serious illness in the family, unemployment or poverty. With Oorah's intervention, these children are able to avoid the pitfalls of anti-social and destructive behavior that often beset vulnerable children." According to Oorah's 2023 IRS tax Form 990, Schedule I, the organization made cash grants to the "Middle East and North Africa" totaling $16,500,000 that year. The purpose of the grant is reported as "to promote religious education." |
According to the Kars4Kids consolidated audit of December 31, 2023 (Note 7, Litigation): "The Organization has been engaged in litigation with America Can! (or America Can), a nonprofit organization over the use of and rights to certain trademarks. In 2019, a jury found in favor of American Can in a single state. Kars 4 Kids' operations in the other 49 states were unaffected by the verdict. On April 1, 2020, the judge ruled that based on the jury's verdict Kars 4 Kids would have to pay compensatory damages of $11,247,542 to the other organization. Based on that judgment, the Organization recorded a contingent liability in the amount of the judgment. Subsequent to the finding of liability, both parties engaged in an extensive appellate process." "On April 17, 2024, the Third Circuit entered a judgment vacating the June 10, 2022 decision and a subsequent, January 17, 2023, amended monetary judgment, dismissing America Can's cross-appeal as moot, and remanding the case with instructions to dismiss America Can's claims with prejudice. America Can has filed a petition for panel rehearing and rehearing en banc. America Can may also file a petition for certiorari requesting that the U.S. Supreme Court review one or more aspects of the Third Circuit's decision." "Considering the Third Circuit's decision, management assessed the likelihood that America Can will succeed in reversing the Third Circuit's decision and believes that such a reversal is not likely. Accordingly, the contingent liability was reversed on the accompanying financial statements." |
According to the Kars4Kids consolidated audit of December 31, 2023 (Note 12, Concentrations of Credit Risk, Accounts Receivable and Donated Goods): "At December 31, 2023, one car dealer accounted for approximately...57% of total income." |
