updated 9/5/2007 2:35:02 PM ET 2007-09-05T18:35:02

Lawsuits over a parade where six people died when a race car crashed into spectators may force the charity that sponsored the event to stop fundraising and severely curtail giving to the children's programs it was created to help.

The founder of the nonprofit Cars for Kids says that could put a squeeze on the programs it has given charitable contributions in the past.

"They're going to suffer," said Larry Price, founder and president of the Cars for Kids charity.  "Some of them may have to shut down."

Six spectators were killed and dozens more were injured when a drag racing car lost control during a car show parade the charity sponsored on June 16 in Selmer, about 80 miles east of Memphis.

Price and Cars for Kids, along with the race car driver, his sponsors and the city, face lawsuits seeking more than $85 million in damages stemming from the accident. A fund begun by Price after the tragedy recently distributed $30,000 to victims via a local advisory board.

Price said the car show in Selmer is where the charity raises the bulk of its money. But with Selmer's board of aldermen placing a moratorium on parade permits and the charity battling multiple lawsuits, Price said Cars for Kids may have to shut down or at least cut back on its giving, causing other charities to lose money.

The charity gave $48,250 to children's charities in 2002, according to the charity's Form 990 from 2002, the last year the charity filed required paperwork with the Internal Revenue Service. Price stated in paperwork submitted to state regulators that his charity gave $92,191 in 2006.

Bicycle accident gave birth to charity
Cars for Kids was formed in 1990, two years after Price's son, Chad, suffered a severe head injury in a bicycle accident. Price promised that if his son was saved from lifelong injuries, he would spend the rest of his life raising funds for disabled children, according to the group’s Web site.

Smaller charities close to Price's home in Selmer would be affected more than larger ones if Cars for Kids stops raising money.

Ellen Neely, an administrative assistant for the West Tennessee Center for Child Development, which operated as the West Tennessee Cerebral Palsy Association before West Tennessee Healthcare took it over in April, said the charity's relationship with Cars for Kids has been "incredible."

"In the past, it's been a pretty huge amount (of money donated) compared to any donor we've had," Neely said.

Jan Boud, spokeswoman for the Jackson-based health care company that now owns the child development center, said it isn't in danger of closing.

"There are no plans at this time to partner with Cars for Kids," Boud said.

The center's IRS filing for the year that ended last June -- the last before the buyout --shows it received $568,134 in direct public support but operated at a nearly $189,000 deficit.

The Exchange Club Carl Perkins Center for the Prevention of Child Abuse in prior years received five-figure donations from Cars for Kids. In 2002, the donation was $12,500, according to IRS documents.

Executive Director Pam Nash said her west Tennessee agency, which runs three different centers, hasn't thought about what its relationship with Cars for Kids will be in the wake of the wreck.

Price reported in his state filings that Cars for Kids gave the Perkins Center $7,000 in 2006. That was a small portion of the more than $537,000 the Perkins Center reported to the IRS that it raised for the fiscal year ending June 30, 2006.

Other smaller charities aren't worried if donations from Cars for Kids dry up.

Cars for Kids reported it donated $14,320 to the Blue Mountain Children's Home in Mississippi last year. The Rev. John Robinson, the home's chairman, said Cars for Kids' donations represent only a small part of the operating budget for the home that houses fewer than 10 children.

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