this post was submitted on 10 Mar 2024
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This is certainly an important point and all, but the store is at the very least providing a huge promotional service. How much more does that particular charity get over the course of a year due to this free promotion.
It's a little weird to me that we're at the point of "I'm not going to donate to sick kids if a corporation I already shop at also gets some small benefit!"
Studies show that people really do give more overall with these campaigns.
And people also really don't understand how write-offs work around here in general. It's not some magical way to invent money. Money that's written off is not taxed, but that doesn't make it not money spent.
For easy math, let's say your tax rate is 20% and you give $100 to a charity and wite it off your income. That means you don't pay the $20 in taxes you would have owed otherwise, which brings the effective cost of the donation down to $80.
There's no magic trick where you give money to a charity and suddenly have more money because of reduced taxes.
I understand the write off part. The part I don't understand is if you give me $100, and then I donate the $100 (so cost of donation becomes $80), do I have to report that your $100 donation to me as income? Or did I just use your money to decrease my tax burden?
On a personal level you can deduct it from your income, but only if it passes a certain threshold...but also, it doesn't really count as income before a certain threshold, so realistically, at that quantity, it doesn't matter.
It starts mattering when you start dealing with donation quantities nearing like, $10000, because then you start to run into the standard deduction (the assumed amount that "well everyone just donates this amount, we don't need to keep track of it all before then, we'll just hand that exemption to everyone"). I forget what the gift threshold is in a similar vein, but it's not as low as $100.
Edit: I went through all that and didn't really address the core of the question. If you get paid a large amount of money, say, $20,000 and then donate all of it, ignoring the standard deduction whackery as discussed above (as a corporation would effectively do), yes, your taxes will have you deduct all of the donation from your income (you will not have to count it as revenue, essentially) if the group is registered properly with the IRS. You do not reduce your tax burden further than you would have if you had not received the donation, you essentially get taxed as though you never got the money at all.
From the store's perspective, money donated through the point of sale and given to charity is neither income nor a deduction. It's just the collection of money that doesn't count as anything to the store's finances.
In the same way, if I pay rent for my entire unit and collect the portions owed from my roommates, the money my roommates pay me don't count as my income. I was just passing it along, and it was never mine to begin with.
Yea I guess I was thinking something like this
I would have to include the donation either in my earnings or report it some other way.
The Smile.Amazon program was pretty rad. I managed to contribute some extra funds to the EFF and talked a few friends into picking them as their charity too. I think the EFF received almost a million dollars from that program. Then one day Amazon was like "nah, we hate helping people" and just cancelled the program.
I stopped seeing things about it but I didn't even realize they killed it. What a shame.
They said it didn't have as big of an impact as they had hoped, so they were cancelling it. A rational person would say "it's not as impactful as we want, so we're improving it", but big corporations are all about killing projects.
I'm just a bit disgusted by the concept. Like McDonalds gives the slightest shit about sick kids or whatever. But i don't know the actual impact or reason they do it, i just distrust it.
Money not put back into governmental systems that are deeply underfunded and the fact that charities are required to only spend 3% of their cash reserves per year on actual charitable costs means that a lot of charities are basically you paying directly to the bank account of a few rich people who employ and enrish themselves off the interest.
Something like only 13% of charities don't pay themselves a salary. Which I don't expect there to be no overhead costs and charity can be great for specific topics that need more nuanced approaches but a lot of charities are just a big business.
Okay, I was not expecting the double-down to be "checkout donations are bad because all donations are bad."
I am also jaded enough to believe most "charitable organizations" are not very charitable.
I'd rather donate to something I know like my local volunteer fire department or community association rather than some org that has too much overhead. And I'm not interested in researching if every org asking for donations is reputable.
I know right? It's annoying and I don't even think all charity is bad it's just a whole lot harder to find actual charities.
You are just choosing to pretend I'm talking in absolutes when I point out glaring issues in our current setup.
Did you know in 2017 the number of Americans making tax deductions on charity donations whent from ~50 million Americans to 15 million without the amount of donations decreasing?
The amount needed to claim was just raised so only richer people could take advantage of it. Only those making more than 3 million a year can now get tax incentives on donations essentially.
Charity is broken at the moment. It's been set up to make money in lots of cases and that isn't easy to navigate in a simple absolute.
I'm not pretending that's what you were actually saying - perhaps it's a little unfair of me to make such a glib comment at your expense.
The truth is that I do understand your point and I starkly disagree. I do a lot of work in the nonprofit world, and at least in the USA, most charitable organizations are doing vital work and making an important difference in peoples lives (or animals, or the earth, or whatever). While there are a few large bad actors that come under scrutiny, and a few fly-by-night operations, charities that solicit public donations do good work.
The abuses in the charity laws mostly have to do with family foundations, and they are not the ones standing on the corner with their hand out. These "private" charities can easily be used as tax shelters and all variety of shenanigans. "Public" charities have to be better because they are under a spotlight more intense than most businesses could stand. they have to be better.
I also don't think raising the minimum standard deduction harmed families - in fact it made it easier and cheaper for most Americans to file. You can always still itemize your donations if you want to.
And if you ask out every single girl you meet, you just may get lucky once in a while. Doesn't make the practice okay.
It's not that the corporation would get a small benefit. It can be fairly sizable. And what corporations don't pay end up as government debt
What benefits? Publicity sure, but they don’t get tax breaks for collecting donations.