Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
When a company such as CVS (or any other retailer, Wal-Mart, Target, etc.) raises money for a charity (i.e., asks for a dollar or a round-up at the point-of-sale), and then donates what is collected, does the company receive a tax benefit?

I ask because it fascinates me that this is actually really pushed at the store level. Some workers I know at a few retailers say this is almost a metric in itself and they are expected to ask everyone who comes through their POS line to donate. I was able to read a memo on this and saw that one company saw this as not only a way to help a charity, but bluntly stated it is good for the brand. That's understandable, and fine enough I suppose, but the inexorable requests I get makes me wonder if there is some economic benefit as well. After all, creating friction at the point-of-sale for a branding exercise that seems almost secondary in nature and not that effective (beyond local politics) appears to me to be a potential misallocation of resources. How does the IRS look at this...once donated to X retailer, is it X's money and thus X's tax break? Thanks in advance...
Print the post Back To Top
No. of Recommendations: 6
There is no financial benefit to the company. If the company treats every dollar collected as revenue, then the donated amount is a deduction that reduces taxable income. If the business treats the funds as collected on behalf of the donors, then there is no deduction. Either way, the taxable income is the same. The benefit to the company from these campaigns is the publicity they get for "donating" $x to the charity. Whose money it is is irrelevant.

Ira
Print the post Back To Top
No. of Recommendations: 0
Ira, thanks for the reply, I appreciate the info.
Print the post Back To Top
No. of Recommendations: 0
If the company treats every dollar collected as revenue....

My utility provider does much the same thing. Via a one-time opt-in, the company asked if I'd like to participate in their charity drive (for a number of State-wide charities), wherein they'd round my bill up to the next dollar and donate the proceeds to the charity fund which they'd then dispense periodically.

Every year at tax time, I get a charitable donation letter specifying the amount I'd donated and the charities to which the money had gone (though not the amount to each charity).

I suppose, had this been done in the dark ages of black/red pens and paper ledger books, this might also have saved the utility some bookkeeping time and effort, but with today's computerized books, not so much.

Eric Hines
Print the post Back To Top
No. of Recommendations: 3
Getting people to donate small amounts at checkout has proved effective. Part of it is the corporate image. It is routinely built into credit card readers. A reply is required to complete the transaction.

I don't because it would mean keeping a large number of receipts though we may not be itemizing in the near future. Most of our donations are through our Donor Advised Fund.
Print the post Back To Top
No. of Recommendations: 0
I was in an Ocean State Job Lot today...

They came on the speaker to ask folks to buy school supplies for kids and OS Job Lot would give them a 10.00 gift card for each 10.00 of school supplies they donated.

It seemed a very strange thing to me.

They were also pushing to buy a backpack to donate and they'd give you back a giftcard for the value.

Sometimes I worry that this is just junk?

I don't want to buy junk for kids. But is something better than nothing?

I'm thinking about that and how much garbage low end companies market only for us to throw away.
We throw it away because it's inferior or just plain doesn't work.

nag
wants to give 'good stuff'
Print the post Back To Top
No. of Recommendations: 0
Thinking back a few years ago when my company got 'lean'.
Every pencil we tried the lead/wood let go and broke.
And in sharpening them, they'd break - of course, just as we were almost to a sharp point.

nag
don't get cheap on me Dodson
Print the post Back To Top
No. of Recommendations: 3
Not everything they sell is trash or you wouldn't have been in the store. Hopefully, they donate what is requested by the charities. That would eliminate items that aren't useful.

As for school supplies, except for the backpack most are consumables. They aren't meant for long term usage.
Print the post Back To Top
No. of Recommendations: 0
As for school supplies, except for the backpack most are consumables.
The backpacks are consumables too...
At least most kids I know are not gentle with their backpacks.
They get kicked/dragged across concrete, thrown, overstuffed with books/materials, and generally abused.
They may not be as short lived as a pencil, but my experience is kids will abuse them and wear them out, so you're not going to get 13 years worth of use out of them. (probably 2, maybe 3.)
Print the post Back To Top
No. of Recommendations: 0
Not everything they sell is trash or you wouldn't have been in the store.
Point taken, it's very true. :-)

I just found it odd that they are basically giving things away.

nag
Print the post Back To Top
No. of Recommendations: 0
I recall reading an article years ago that stated that companies did in fact receive a tax deduction....they are donating those funds collected.
Print the post Back To Top
No. of Recommendations: 3
I recall reading an article years ago that stated that companies did in fact receive a tax deduction....they are donating those funds collected.

If they are taking a deduction, it just offsets the revenue that they have to recognize for collecting the funds.

AJ
Print the post Back To Top