Consumer Advocacy
So You've Decided to Donate
Timeshare Donations and You
Timeshares have become the bane of existence for many middle-American families, the virtual equivalent of Coleridge’s albatross pendant in the world of vacation real estate. That having been said, most people, once buying into a timeshare that proves worthless, will exhaust all potential escape routes at their disposal whether they’re viable options or not. The success rate of these escape attempts varies wildly from timeshare to timeshare and is determined almost exclusively by the market worth of the property in question. Needless to say the better your timeshare fares through natural depreciation rhythms in the market the easier it will be to sell it. Some timeshare scams, sold at high margins to cover “overhead costs” such as free weekend getaways for prospective clients, depreciate as soon as they’re purchased by three-quarters of their original cost – or more. It is these timeshares in particular that are most difficult to unload.
One of the grayest areas Timeshare Consumer Group has researched has been the donation process. Many people view the possibility of donating their timeshare to charity as a last resort trump card: “Well, even if I can’t sell at a profit I’ll donate and get a hefty tax write-off.” Indeed, this is precisely what timeshare companies would like the general public to believe; the more options there are for unloading “problem” timeshares the greater the chances an individual will buy one on impulse. And yet repeated analysis on our part bears the same truism on this matter, summarized well in our FAQ: it is possible, but not probable, that you will be able to donate your timeshare to charity.
But perhaps we’re getting ahead of ourselves. There are two popular types of timeshare donation, both distinct from one another and used in wholly separate circumstances. The first, which we won’t discuss in great detail, is when a timeshare owner decides to offer up a portion of their annual weeks to an organization (usually a religious one) for recreational use. This is essentially the same as renting your timeshare weeks; however, instead of renting, you simply donate the weeks to your church for an elder to use. You still retain ownership of the timeshare and responsibility for all timeshare fees during the donated weeks, although you might be eligible for a tax deduction on the fees accrued during that time. This form of donation is not a way to rid one’s self of a timeshare. It is usually used when an individual finds they cannot use a week they scheduled and cannot rent it out, either.
The second type of donation is the escape route, the kind that many timeshare users and experts seem to equate with a “get out of jail free” card. An article in Associated Content on the matter had this to say:
“You may be surprised to learn that often, donation makes the most financial sense. It costs nothing for the charity if you donate directly, and you get a simple, fast, and socially-responsible way to get rid of your timeshare. So if your timeshare is more trouble than it's worth, consider donating it to your favorite charitable cause. You'll support work that you admire and get a tax write-off to boot!”
A fairly cut and dry proposition, or so it would seem. However, the author of the article also lists links to several donation organizations that TCG researched for those fine print clauses that often contradict the sales pitch. What did we find? Well, if your timeshare is indeed “more trouble than it’s worth,” chances are charities won’t want the trouble, either.
One donation website, which will remain anonymous here, published some fascinating information in its FAQ. Apparently every timeshare submitted to the organization undergoes a four week “market analysis” where the property’s value is assessed. If during that analysis it’s discovered that the property cannot be sold at a profit, it will be rejected. Most of these organizations also hold the right to refuse a timeshare based on any criteria they deem unsavory: this almost certainly includes timeshares purchased and sold through questionable business practices the buyer may have been unaware of at the time. Timeshare scams are simply too much of a liability. We’ve discovered since reading this information that such fine-print restrictions are virtually ubiquitous across donation organizations.
The good news is that if your timeshare is accepted you’ll be refunded for any maintenance fees accumulated during the market analysis and subsequent donation process. But if the timeshare can be sold at a profit at all it begs the question of why one would need to donate in the first place. Granted, it saves you the headache of advertising or potential listing fees and you won’t have to sift through a mountain of resale scams. You also might simply want to be charitable, which is certainly commendable. But most people unfortunately view timeshare donation as a shortcut to timeshare-free living; a myth that desperately needs mainstream debunking.
If you’re planning to donate your timeshare, consider doing the research to discover whether or not it truly is a worthwhile venture. At the very least most experts rightly recommend that you have your timeshare professionally appraised beforehand, a potentially costly service but one that could save time and money later in the process. An appraisal is also a necessary step in any tax deduction.
Some quotes from "Donate Your Timeshare to Your Favorite Charity" By Karama C. Neal, published by Associated Content on May 4, 2007
