I always hear how corporations only donate to write off on their taxes. But how does that make sense? They don’t keep the money, it’s gone – they’ve given it away.
Does the government say “if you donate x amount of money, we will reduce your tax rate by x percentage”? This is the only explanation that makes sense to me, but from what I’ve read that’s not the case.
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Somebody inside the company is getting a perk or kickback for promoting the charity. Charities often offer representatives of large companies rewards for promoting the charity or collecting donations. The company representatives can win a free trip or other reward for participating especially if they bring in the biggest collection of donations or get the biggest response from an advertising campaign. It’s also good public relations for the company.
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