- The Washington Times - Saturday, December 15, 2001

The people wade amid the sea of metal and glass on a muddy lot off Gallaudet Avenue in Southeast. They open doors. They pop trunks. They lift hoods.

"Engine's shot on this one," one visitor says, leaning over a shiny emerald green 1984 Jaguar

"This one ain't bad," says a friend, inspecting a 12-year-old Mazda MR2. He finds out later it is missing a water pump.

They're not pretty cars. Some of them don't even run. But many of them do, and many of the hundreds of people who convene on this Thursday morning would be more than happy to hand over a week's wage for a set of wheels. And when the auctioneer starts yelling into his megaphone about 30 minutes later, many of them do.

This is the weekly Thursday auction of Capital Auto and Truck Auction Inc. Hundreds of cars are sold on this day. Hundreds more will be sold this week at other Capital auctions in the District, Richmond, Philadelphia and Manchester, N.H. On an average week, Capital auctions off 1,500 cars.

The company gets a fraction of the money from the cars, based on buyer's fees that it tacks on, which are usually about 10 percent to 15 percent. All of the money from the car itself goes to Capital's business partners nationally recognized organizations such as the Salvation Army, Melwood and the Red Cross.

More than 90 percent of the cars Capital receives are from charities that accept car donations. People donate the cars to the charity, which gives the car to Capital to sell. The donor gets a tax break.

The number of charities accepting car donations has increased dramatically in recent years, as has the number of charities using third-party companies such as Capital to auction off the cars. It began with Goodwill Industries in 1978, but now just about every reputable national charity and most local ones accept car donations. Many charities, such as Melwood, which helps with the developmentally disabled, use it as their main source of fund raising.

"Pretty much every significant national and local charity has jumped on that," says Joe Davis, spokesman for the District-based Davis Memorial Goodwill Industries, which began using Capital in August after determining that it could save money on overhead costs. The branch has given Capital about 1,000 cars to auction.

"I do it cheaper than the charities can do it themselves," says Gordy Zaritsky, Capital's vice president. He is sitting inside an office in Capital's 60,000-square-foot headquarters on Bladensburg Road, sifting through a list of more than 50 charities he works with. The headquarters is filled with cars; there's another auction here today.

Mr. Zaritsky won't discuss the private company's financial details, but he says donations have picked up as they always do toward the end of the year, and that they are coming in faster than Capital can sell them. He has had to turn some charity car donations away to make space for others he has commitments with.

That's good, he says, because the average car sold by Capital brings in $400 to $500. Capital is the definition of a volume-based business, and the company plans to move its weekly Gallaudet Avenue auction to a more spacious lot in Temple Hills by the beginning of the year.

Mr. Zaritsky and his partner, company President Mark Loesberg, are picky. They will drop a charity from their client list if they are unsatisfied with the amount of money being allocated to that charity's causes. And they've dropped in at the offices of Melwood, the Salvation Army and even the Chesapeake Wildlife Sanctuary to see the charities at work.

"I'm not going to hang my name next to a charity that I don't feel is 110 percent," Mr. Zaritsky says. "Why would I mess with somebody that's not doing the right thing?"

Mr. Zaritsky says Capital's efforts to work with reputable charities has helped the company follow its motto: "Beyond the appearance of an impropriety." The motto was created after a study from the California Attorney General's Office revealed that third-party brokers took nearly 80 percent of the money from charity cars.

"Some of these arrangements may result in a small percentage of the price going to the charity," says Bennett Weiner, chief operating officer of the Better Business Bureau's Wise Giving Alliance. "If you're going to donate the car, you need to check out the financial arrangements."

Financial improprieties haven't been an issue with Capital; the company charges the charities only an $88 processing fee for picking up the car, getting it to the auction site and doing the title work.

"They're not making much money off of us," says Mr. Davis, who adds that Goodwill is "very pleased with the service at Capital."

That sentiment has been echoed by William Madison, an administrator with the Salvation Army's Washington office, who estimated that his group has given Capital 7,000 to 8,000 cars to auction off this year.

Now, Capital is almost done developing software that will streamline the process by which charities can accept donated cars for sale at its auctions and make record-keeping easier.

"It'll add a level of credibility in accounting to a lot of the smaller charities that they've never been able to afford," Mr. Zaritsky says. "People should look at how we do it as an example of how it should be done."

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