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Automatic ?Charitable Contribution? Charged to Folio

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Automatic “Charitable Contribution” Charged to Folio

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Old Jan 28, 2025 | 9:16 pm
  #16  
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My bad. I was repeating what I had heard, but I was wrong.
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Last edited by wcj1; Jan 28, 2025 at 10:42 pm
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Old Jan 28, 2025 | 9:37 pm
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Most places (like grocery stores) do it because their justification is: "Most people don't donate because no one asks, so we want to be the ones to ask."
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Old Jan 28, 2025 | 9:39 pm
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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.
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Old Jan 29, 2025 | 11:22 am
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They can take "social credit" even if they can't get a tax credit, so I think that's at least part of the reason these are promoted, and as noted they may get to take a percentage of it as a fee for their own efforts (just like professional fundraisers do). I always turn these down, as I prefer to make my donations directly to the charity - I know they received it, I know they got the full value of it, and I know exactly which charity is involved that it's one which I want to support. There are plenty of times I encounter one of these "round up for XXX" requests that's for a charity I already support, but I'm still going to turn it down and stick to my donations that are direct to the organization itself.
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