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INsider: Kars4Kids loses bundle in investment krackup, report says

Charity purportedly put money into risky real estate ventures

We’ve all heard the spots on the radio for Kars4Kids, along with the accompanying jingle that sounds so cute and catchy the first time you hear it but upon the 432nd listen feels more like a) a violation of the Geneva Convention, and/or b) oral surgery conducted with flatware.

Well, it appears that all is not going well for Kars4Kids Car Donation. According to a report by NBC New York, the charity that donates automobiles to children lost a fortune investing in high-risk vehicles. The station reported that Kars4Kids lost more than $5 million on property investments in 2010. During that same time, the nonprofit spent about $6 million on programs for children.

NBC claims that the charity lost $2.5 million on a proposed outlet mall on Staten Island. In addition, Kars4Kids reportedly took a $2.3 million haircut on two failed condominium towers in New Jersey. Further, the charity invested $500,000 on a project in the Sanhedria neighborhood of Jerusalem, Israel. The property, NBC said, ultimately was foreclosed upon.
In total, Kars4Kids lost more than 15 percent of its net assets on real estate ventures, the channel reported.

The station did interview Hank Sheinkopf, a spokesman for Kars4Kids. He said the real estate investments were made to build an endowment for the nonprofit so that the charity could expand its services to children in the future.

“We believe real estate will return to value,” he told NBC News.

There’s more to the story, as well. It turns out one of the two groups behind Kars4Kids is actually a charitable mission that seeks to introduce nonobservant Jewish children to Orthodox Judaism — a minor detail not mentioned in the radio song.

Admittedly, it’s probably tough to work that into a jingle.

To read the full article — which happens to be a great piece of investigative reporting — click here.

You can also view the video report from NBC New York below.