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Posted by Nicole Tai, N. California Development Director for DRN:
Lately, we've
been encountering property owners who are not doing all their homework when it
comes to their selection of appraisers and
deconstruction contractors. Many
think our organization adds an extra layer into the mix, but in fact we are
providing you a GUARANTEED donation. Only a few other organizations can say
that in California. I love making deconstruction happen, but our industry needs
to maintain certain standards to remain effective and true to the goals of
reuse. In this blog post, I outline the differences between non-profit and
for-profit contractors and appraisers. As you read on, keep in mind the old
saying, "If it is too good to be true, it usually is" because it is
perfectly applicable to this industry.
The 2004 Non-profit Integrity Act requires for-profits to register as fundraisers for
non-profits, and this means that if a company is offering a tax deduction
for deconstruction, it needs to have a written agreement with a non-profit.
Unfortunately, most of the outfits in the San Francisco Bay Area are not in
compliance with this act and are not registered. They are operating independent
of the non-profits they are soliciting donations for, many of which aren't even
aware of these "deconstruction contractors" and appraisers. These
companies may not see it as a fraudulent act, but in reality they are no
different from used car dealers who "solicit" car donations from
unsuspecting donors.
At
Deconstruction & ReUse Network (DRN), we may seem "picky" because
we are maximizing reuse potential through local and legitimate markets. We work
with both for-profit and non-profit reuse groups to ensure that materials are
either reused in projects, or resold to the general public -both of which keep
valuable items out of the landfill. We make sure that materials are removed
well to insure that they actually will and can be reused.
We aren't going
to tell you we can reuse that 1960's furnace when in reality it will be
recycled for the copper and metals. It is important to note that recycling does
not constitute a donation. Why not? Without getting into boring details,
recycled materials only yield a fraction of the value when compared to reusable
items. In the deconstruction industry, contractors will generally
calculate the value of recyclable metals to help offset their cost to the
client and this number is NOT factored into the donation.
If you are
planning a home demolition and are approached by a for-profit Deconstruction
Contractor or Appraiser for a house donation, we encourage you to do your due
diligence by asking the following questions:
- Does the non-profit your materials will
be donated to actually exist?
- Is the non-profit’s mission relevant to
reusing building materials?
- Ask to see a copy of the agreement with
the non-profit, or their filing with the state attorney general as a
fundraiser.
- Will someone from the non-profit be on
site (required) to conduct the inventory, as well as provide you with both a
copy of that inventory and documentation of the process?
Failure to
acknowledge these important issues may result in you forfeiting the fair market
value of your donation to resale value. The worst-case scenario is an IRS audit
FOR YOU.
Alternatively,
you can choose to go with tried and true, reputable organizations like us -
Deconstruction and Reuse Network. If you have more questions on this topic,
feel free to comment below or email me, and I would be more than happy to answer them.
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