I’ve seen large corporations brag about donating large sums of money to charity.
Are donations collected at checkout (E.G Checking out at Publix and the cashier asks “Would you like to donate to cancer research?”) included in those sums?
Are donations collected used for tax benefits of the corporation?
In: Economics
the issue people are not pointing out is that you dont know what charity that money is going towards.
it could go towards a charity entirely focussed around helping billionairs fund their third familys fourth yacht or that charity spends so much of its donations on its staff that barely anything actually goes towards its cause.
there’s some charities out there that for every dollar donated 98 cents goes directly towards what the chairty is working for. some have as low as 1cent per dollar and are effectively ways of funnelling money from one source to another.
its the reason I support a few specific charities and I dont support any more. because those charities do things I feel are good and actually spent their cash on those things.
its like…do McDonalds really need me to donate so they can help house people who’s kids have bad illnesses or can their fucking bottom line loose a percentage point and achive that same thing. (for what its worth I do like what the Mcdonalds charities do I just feel that a company that makes as much as they do can stand to spend some of that money doing the right thing instead of demanding I spend my own far more limited funds)
Something that rarely comes up when this question is asked is that the charity has a role to play. It’s up to the charity to be aware of where the donations are coming from and whether it’s actually out of the company’s pocket or if they ran a collection. If the latter, the charity legally can NOT issue a receipt,so there’s no tax break for the company. Period. So if the charity is doing its due diligence and following receipting laws, it’s a non-issue.
Source: I work at a charity and am responsible for receipting. I legally can’t issue receipts in these cases or it puts our charitable status in jeopardy.
So caveat that this was years ago, but I had a friend who managed a big supermarket and he said it was legit…kinda. If spent the $10, they would indeed spend the $10 on food.
The caveat was, the charity was run or beholden to the parent company of the store somehow. So, they’d buy a set $10 bag to donate to a local food bank…..made up of the highest profit margin items the store could cram into it. He said it *was* essentially like buying $10 worth of food and donating it to a local food bank, provided you just *coincidentally* bought some of the most profitable non-perishable items in the store.
If you’re going to give cash, for the love of God give it directly to the food bank. They get *almost nothing* in cash, and most of them have relationships with distributors to get *insane* deals on stuff that isn’t moving. They’ll get exactly what they need and way more of it if you just give to them directly.
[Edit]
Sounds like this is asking more about pass through cash donations? And it looks like that’s pretty well answered.
As many people have described, it is tax neutral for the company, but there are two other aspects of it that are not “neutral”.
First, the person donating doesn’t get a tax deductible donation (if they itemize). More annoying is company executives get recognition from the charity for “their” donations in the form of board seats, networking, reputation benefit, and sometimes other perks.
It’s a way of looking charitable with someone else’s money.
The company steals the money.
I used to run Red Nose Day charity drives for Walgreens, they advertise 90% of the donation goes to charity. But the truth is the company takes 10%, then uses about 50% to pay for all the merchandise and marketing it cost to run the drive. Then the remaining 40% goes to another company owned by Walgreens and they take half that as a “processing fee” and then a % to pay their employees.
(Also the board of Walgreens takes turns as CEO of this “other company” pocketing about 3 – 4 mil every year for themselves)
So for each dollar spent Walgreens takes 95 to 99 cents.
This is just Walgreens but I believe all the other companies do the exact same thing.
If you are patient enough and willing to save every stinking receipt you can claim it on your taxes too. Don’t know if it’s worth it but you can.
Companies get to keep .67 cents of every dollar for operations coast and only give .33 cents to stated charity. (source) Business classes.
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