Sorry but this sub has a policy of crediting people rather than passing content off as their own. You can always just not click the link. Lifting content without crediting the op I got it from would be unethical
Even if it is revenue, it is still a net loss. All it does is reduce taxable income, which is still makes the donation a net loss. For anyone not aware, the current federal US corporate income tax rate is 21%. So if a company gives 100 dollars to charity, they only save 21 dollars in taxes, so they are still down roughly 79 dollars, depending on the state taxes of where they are incorporated.
Yeah but in this scenerio company isn't the one giving that 100 dollars, customers gives company 100 dollars to donate, company donates it, gets 21 Dollars back. Which is a 21 dollar profit for the company
No, but you should still donate yourself. It allows you to focus on charities that you care the most about and which you can research as having the greatest potential positive impact.
If you give $1 to Grocery Store to donate to Cause, what happens is Grocery Store gains $1 of taxable revenue, then they remove that $1 of taxable revenue with the deduction. All the deductions do is make it so that Grocery Store neither gains nor loses money from the forwarded donations. They simply aren't paying taxes on the money you gave them to donate.
Here me out before accusing me of being a billionaire toady.
Not really, at least not in the US. Charitable contributions are a deduction from taxable income, not a credit, so it is still a net financial loss to donate.
Where the benefit comes is the PR and power over the organization they donate to and its sphere of influence.
It is a net loss if you donate your own money, in this situation Company isn't donating from it's own revenue. It is donating customers money.
If I donated 1000$ and claimed tax deductible it would be a net loss. But if I asked everyone for donations, raised 1000$, donated that and claimed tax deductible that wouldn't be a net loss.
Or just...donate the perfectly good food they constantly throw out into the cadged dumpsters designed to keep homeless people out... Litteraly would cost them nothing...
As much as I hate Kroger, Fred Meyer's donates a LOT of food. Not sure about other stores but I remember a story saying they were one of the top contributors for perishables.
People that give money for those charities are giving those companies free tax write offs.
You donate $10 or whatever. The company can then claim that $10 as a write off via donation to that charity. Campaign as a whole (either regional or national) collects $1M USD. Corporate accountants write off donation. Tax liability reduced.
No, that's not how it works. In order to do so, they'd have to first claim the money received as income.
That said, there are scummy things that they do. At the least, it's saying "we [bigcorp] donated $1,000,000 to charity" when in reality all that they did was collect it. In other situations, companies like Sobey's doesn't actually pass on food bank donations as cash, but rather have then as credit to buy products only from Sobey's.
That's not how tax write offs work. The only way to claim that money in a write-off would be for the business to also claim it as revenue. That would even out, with no tax savings. Businesses also don't handle donations that way, they usually serve as a collection agent that just passes your donations on without being able to claim it towards their revenue or their tax write offs. The only person who can write-off their donation is the person who actually made it.
The reason businesses do it is for marketing. They get to put out a press release saying "They helped donate $10 million to puppies without borders."
I intended on writing this comment yesterday but jerboa timed out on me. It's a common misconception and I understand how it gets spread, but I wish there was better knowledge and education of how taxes worked in general. Would make it easier for the average person to spot the ways companies do evade taxes, too.
How bout the fact if they achieved their goals, they wouldn't have a problem to have a charity for and thats a bigger concern to them. They'd rather not help people than not exist. They may as well just pretend they are the poor people their campaigning for. Or be technically homeless and donate to themselves while living in charity(company) owned residence
Nah the charities are usually legit. But the companies aren't doing it out of the goodness of their heart, it's a massive tax write off as well as free PR.
I hate when they pull this shit at drive through fast food. “Would you like to round up to donate to our charity?”
Who knows what the person taking my order thinks about this charity, and what they might do to someone’s food who says no.
Edit: The fact that merely implying a fast food worker wouldn’t be a complete perfect human being gets so many downvotes says a whole lot about this community.
I used to work fast food and retail, both which forced employees to ask customers to donate at the till. We hated doing it. It is awkward for both the customer and the worker. I would get anxiety when donation drive time of year would come round, and I'd feel relief when the customer either just said no or yes, and didn't yell at me for asking. The cashier REALLY does not care if you donate or not. And the cashier usually does not make your food, it's usually someone else doing the cooking, and the cooks aren't paying attention at all to whether you donated or not.
Same. I got lectured so many times by customers who insisted I was stupid for daring to ask them and acted like I had some sort of personal stake in the charity.
Then most of these same people would buy a ton of lottery tickets when I was in retail.
On the other hand, I have heard people ask that question, answered yes, and then checked my receipt later to find out that I just handed $0.57 to round out the cashier's drawer.
I hate these donate screens because I have no idea where the donation actually goes and i don't want to have to do a ton of research at the grocery checkout about whether its a good charity.
Yeah but just because they name the charity doesn't mean its a good charity. Some charities just aren't good ones to donate to and you're basically just throwing money down a well when you do donate to them.
Why don't you help by lowering the prices and being more reasonable? How do I even now you're actually using the money I donate for people's bills? That's a crazy donation request.
Come on now, be reasonable. Lowering the prices would mean they can't buy their 5th mansion. Just stop being selfish and give them a little more money.
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