Originally Posted by
wcj1
If people don't realize why companies do this, it is basically this:
* You donate $1 to the company (hotel/grocery store/whatever)
* They they donate it to the charity, but since it is now 'their' money, they take the tax write off for it. Their shareholders and management team thank you for making them more profitable.
So it is another scam for corporations to lessen their tax burden, by being the middle man on a 'charitable' donation.
If this is in the US, this is a common misconception as the tax codes does not allow them to do this. They cannot write off a donation with funds that weren't theirs to begin with. They would have to claim the donation proceeds as income (which would incur more taxes) to write it off (which would net negative for the business).
However, they can take a portion of the raised funds for "handling and administrative fees" which would be legal and can be a source of income. Most charities agree to this because large chain stores have more reach than their own efforts. And they get to take pictures of the big fake check presentation for PR purposes, and the charity would thank them in promotional materials leading to free advertising as well.