Rising vehicle sales are boosting dealership revenues, making it easier for dealers to give more to charities.
"On a year-over-year basis, the dealer financials reflect an increasing dollar amount contribution toward charitable activities," says Paul Faletti, CEO of NCM Associates, Inc., a dealership consulting firm in Kansas City, Mo.
And an Ally Financial survey done in September found that 65 percent of dealers surveyed said charitable contributions increased in 2012 compared with 2011, and that 54 percent plan to increase their contributions this year.
According to the National Automobile Dealers Association, the average dealer's contribution to charity in 2008 was about $22,000. That amount rose to about $29,000 in 2011, the last year for which data are available.
An NADA analyst thinks charitable giving in 2012 will be flat, or perhaps up a bit. "Toyota and Honda dealers had a better year than the previous year, when they couldn't get cars, but GM had a worse year," says Paul Taylor, the National Automobile Dealers Association's chief economist. "There'll be some differences in who did what, but the average amount won't go up significantly in 2012.''
But part of an expected increase in contributions by the end of this year is expected to result from an increase in auto sales. Several analysts expect U.S. vehicle sales to be near 15.4 million units this year, up from 14.5 million in 2012.
"As the business climate improves, dealers continue to see their obligation to charitable activities as one where if they can give more they will give more," NCM's Faletti says.
The average percentage of dealership gross revenue given to charity remained at about 0.1 percent per dealership from 2009 through last year, Faletti says. But the average annual dollar amount donated has risen because increased car sales contributed to larger gross revenues, he says.
But dealer financial statements do not reflect the true amount dealers give because many charitable donations don't show up on the statements, Faletti says. Many dealers donate automobiles, volunteer time or they account for charity spending in a marketing or promotions account, he says. Some also donate from a private foundation.
But more dealers are giving, as evidenced by participation in the National Automobile Dealers Charitable Foundation Ambassadors Program, says Annette Sykora, an NADA board member and trustee for the charitable foundation.
The Ambassadors program is a charitable foundation with about 620 participants. Most are dealers, although some auto executives and other dealer associations also belong. The program provides about $230,000 each year to various charities.
Sykora says participation, which requires a minimum one-time donation of $10,000, stalled in 2008 and 2009. But in 2010, there were 29 new ambassadors, followed by 52 in 2011 and 53 last year. Sykora said she expects at least 100 new ambassadors this year.
"It's definitely due to the improved volume and profitability from new-car sales, where dealers have more profits and feel they can be very charitable," says Sykora, dealer principal of Smith South Plains in Levelland, Texas.