Charity organizations say that the donations they're receiving are in decline just as the need for their services are on the rise to what may be the greatest level of our lifetimes.

In this economy, many of us are in little position to help. But there is at least one thing that many of us can do. Most of us will eventually need to replace our cars, and when that time comes, we can offer our old car as a donation to charity.

Plenty of people are already offering their car for donation. There were 311,451 donations of vehicles in 2005 worth an average of $1,508 each, according to the IRS.

Offering a car for donation is usually a pretty easy thing to do. Most of the programs that handle car donations will tow your car away for free. In general, they will accept cars that aren't running or that can't pass state emission standards.

There is a tax deduction available for offering your car for donation. If you've done this before, though, you should be aware that the tax rules now aren't as generous as they have been in the past.

Prior to 2005, the available tax deduction was equal to the fair market value of the car offered for donation.
Now, you are usually only able to deduct the fair market value if the car is worth less than $500.

A charity or the company that runs its car donation program will often resell the cars they receive. Under current tax law, you can only deduct an amount equal to the resale price, unless the car is worth less than $500.

Be sure that your charity provides you with written documentation of the sale. donate car to goodwill are required to provide documentation within 30 days.

A couple of other things to be aware of if you offer your car for donation:

In most states, it's the donor's responsibility to notify their state's department of motor vehicles of the change in registration after donating their car. Don't forget to do this. If you fail to notify the DMV of the change in ownership, you could be charged for parking tickets and other penalties for violations committed by your car's next owner.