For more than fifteen years CharityWatch has been warning donors about transparency and financial efficiency concerns involving Kars4Kids, including its close financial relationship with its affiliated charity, Oorah. CharityWatch started reporting on Kars4Kids in 2010 and focused on whether donors responding to the organization’s ubiquitous “1-877-Kars4Kids” advertising campaign fully understood where their donations were actually going and what programs they ultimately supported.
Now, a recent court ruling and ongoing litigation are bringing renewed attention to concerns CharityWatch has highlighted for years. Namely, whether Kars4Kids’ advertising adequately discloses that donated funds primarily support Oorah, an Orthodox Jewish outreach organization operating largely in New York and New Jersey, rather than supporting children’s causes more generally.
CharityWatch has also long cautioned donors that, regardless of the organization’s mission, Kars4Kids has historically received poor ratings from CharityWatch due to consistently low program spending and high fundraising and other overhead.
On May 8, 2026, following a bench trial in California Superior Court in Orange County, Judge Gassia Apkarian ruled against Kars4Kids in Puterbaugh v. Oorah, Inc. (Case No. 30-2021-01216844-CU-BT-CJC), finding that the charity violated California’s False Advertising Law and Unfair Competition Law through advertising that the court concluded was “misleading by omission.”
The case was initiated by California donor Bruce Puterbaugh, who donated a nonworking 2001 Volvo XC to Kars4Kids in 2021 after years of hearing the charity’s familiar advertising jingle. According to the court’s ruling, Puterbaugh believed his donation would benefit underprivileged children, including children in California. After learning that Kars4Kids primarily directs funding to Oorah, an Orthodox Jewish outreach organization whose programs are concentrated in New York, New Jersey, and Israel, he filed suit under California’s false advertising and unfair competition laws.
Following a bench trial, the court ruled in Puterbaugh’s favor and ordered Kars4Kids to pay him $250 in restitution for the donated vehicle. While the monetary award was modest and largely symbolic, the more consequential outcome was the court’s injunction barring Kars4Kids from continuing to air its advertisements in California in their current form. Future ads, according to the ruling, must clearly disclose the organization’s religious affiliation, the geographic location of its primary beneficiaries, and the nature of the programs supported by donated funds.
Kars4Kids has consistently received ratings ranging from “C-minus” to “D” on CharityWatch’s A+ to F rating scale for the past decade. Our current rating of the organization is “D” based on our analysis of its 2023 IRS Form 990 and consolidated audited financial statements. We found that Kars4Kids spent only 47% of its budget on its programs that year, with the remaining 53% going to overhead. We also found that it cost the charity $47 to raise each $100 in cash support in 2023.
NOTE: CharityWatch generally updates its ratings every other fiscal year. We are awaiting the Kars4Kids’ 2025 IRS Form 990 and audited financial statements for our next update, which were not yet publicly available as of the date of this article.
CharityWatch’s rating of Kars 4 Kids includes the financial activities of the legal entities consolidated in its audited financial statements for the organization’s fiscal year ended December 31, 2023. According to Note 1 of the consolidated audit, these include:
“…the accounts of Kars 4 Kids, Inc. and its wholly owned subsidiaries Carsandmore2001 LLC, K4K LTD, Kars Resources LTD, K4K LLC, and K4K Medial LLC. Carsandmore2001 LLC sells donated vehicles outside of the organization’s usual distribution channels. K4K LTD and Kars Resources LTD provide back-office services to the Organization in Israel. K4K LLC holds investments in real estate and real estate donations. K4K Media LLC is an in-house advertising agency for the Organization. All material intercompany balances and transactions have been eliminated in consolidation.”
According to the Kars4Kids consolidated audit of December 31, 2023 (Note 9, Related Party Transactions):
“The Organization distributed most of its grants to an affiliated nonprofit organization under common management. Total grants to related organizations during 2023 amounted to $36,120,405. Total grants from the related organizations during 2023 amounted to $1,253,187. In addition, the organizations share premises, and certain overhead costs are allocated between them based on usage.”
According to the Kars4Kids 2023 tax filing (IRS Form 990, Schedule M) and audited Consolidated Statement of Activities for the year ended December 31, 2023, approximately 86.3% of Kars4Kids’ reported Total Revenues in 2023 consisted of donated cars, other vehicles, boats and planes; approximately 10.1% consisted of donated real estate; and approximately 1.5% consisted of donated clothing and household goods.
In April 2024, a proposed federal class action titled Dugger v. Kars4Kids Inc. et al. was filed in the U.S. District Court for the Northern District of California. The complaint alleged that Kars4Kids and its affiliated organization Oorah engaged in deceptive fundraising and advertising practices that misled donors into believing their vehicle donations broadly benefited needy children, when in reality the overwhelming majority of charitable distributions supported Oorah, the Orthodox Jewish outreach organization operating primarily in New York, New Jersey, and Israel.
The Dugger complaint went beyond alleging isolated misleading advertisements and instead portrayed what plaintiffs described as a long-running nationwide fundraising scheme built around the highly recognizable “1-877-Kars4Kids” advertising campaign. It included claims under the federal Racketeer Influenced and Corrupt Organizations Act (RICO), California false advertising laws, and California unfair competition laws, also citing prior regulatory actions and advertising practices that, according to plaintiffs, demonstrated a pattern of donor deception spanning many years. In addition to seeking financial restitution for donors, the lawsuit requested injunctive relief aimed at forcing changes to Kars4Kids’ advertising and solicitation disclosures.
According to court filings, the case was dismissed without prejudice in April 2025. A dismissal without prejudice generally means the court did not reach a final decision on the merits of the claims. The plaintiff is typically permitted to refile the case, subject to applicable procedural rules, statutes of limitation, or other requirements. It is not the same as a ruling that the claims lacked merit, nor is it a finding in favor of the defendant on the underlying allegations.
As previously reported by CharityWatch, a newer proposed federal class action, Savva et al. v. Kars4Kids Inc. and Oorah Inc., was filed in the U.S. District Court for the Northern District of California in November of 2025. According to public statements from plaintiffs’ counsel, the lawsuit similarly alleges that donors were misled by Kars4Kids advertising and fundraising solicitations regarding who ultimately benefits from donated vehicles and charitable contributions.
The case remains pending in the U.S. District Court for the Northern District of California. On May 13, 2026, Judge Yvonne Gonzalez Rogers vacated a hearing that had been scheduled for June 2, 2026, noting that the court may either reset the hearing at a later date or issue a written decision based on the parties’ filings. The order did not resolve any of the claims or dismiss the lawsuit, and the case remains active.
Past CharityWatch reporting noted that regulators in several states previously raised concerns about Kars4Kids. Pennsylvania and Oregon attorneys general reached settlements requiring stronger disclosures and imposed penalties related to allegedly misleading solicitations. Minnesota’s attorney general reported that very little of the charity’s spending benefited Minnesota children despite extensive fundraising activity within the state.
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| Charity | |
|---|---|
| Kars4Kids |
