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Ah, this again.
The mega corporation did not receive any tax benefit from collecting donations. They are able to write off the amount of donations from their income, so that they aren’t paying tax on the money they collected specifically to be donated.
- Company collects $1 donation from customer
- Company has $1 extra income
- Company donates $1 to charity
- Company writes that dollar off of their income.
- Company reports the exact same profit/loss as if they had not collected donations.
They do get a whole lot of advertising, social capital, and influnce over which causes get proped up, on the back of donating customers, while you’re out a few bucks that you could have pooled for a single charity and gotten a tax receipt of your own for.
They do get a whole lot of advertising, social capital, and influnce over which causes get proped up, on the back of donating customers
Sure, but that’s not a tax write-off as originally said. Stick to the things that are actually things.
while you’re out a few bucks that you could have pooled for a single charity and gotten a tax receipt of your own for
If your donations for the year exceed the standard deduction (hint: the standard deduction is about $15k. Most people take that instead of itemizing). Doesn’t have to be one single donation, and if your receipt shows the donation (it should) and it’s for a legitimate charity I don’t see why you couldn’t use that to deduct that donation if you itemize.
That leaves out when the company prompting you charges an administration fee to collect part of that sum donated for their own profits.
It leaves out when they, like CVS did with the diabetes association charity collecting at checkouts, take the money as an IOU to the charity while making money out to offset loans in the near term.
It leaves out structuring of collected funds to allow a 503C arm of the corporation to have tax advantaged status while also specifically being chartered to help the for profit company that you are shopping at.
There are a variety of scummy practices employed by organizations collecting those funds and it absolutely can benefit them to do so.
They don’t even report it as income, because it’s not income. It’s your donation, not the company’s donation.
I assumed this was true also, but I also believe the company is receiving some sort of kick back from this otherwise they wouldn’t be doing it.
It’s a marketing thing. Stuff like this creates the illusion that they’re good corporate citizens.
Of course, they could donate a fraction of a fraction of a fraction of a percent of their own profits and make a much bigger impact, but that would set a bad precedent! Giving away your money is only for the working class!
The non-profit can hire the company executive and pay them, which if I understand correctly is exempt from income tax.
I think this can be a way for executives to avoid income tax: basically donate to a foundation through obscured means (crypto, purchase from third party, etc), then get non-profit money with exemption. They probably need to jump through many hoops and it is very likely still illegal, but I wouldn’t be surprised if this is common.
But anyway the couple dime people are donating probably is neglegible for tax purposes (I am guessing, I don’t have data). Yet I see no reason not to just donate to a charity you trust online…
Source about income tax: https://www.investopedia.com/ask/answers/08/nonprofit-tax.asp
It’s true but it’s not the full story .
Who gets to go the charity dinner and presents the check to the orphanage?
Who gets in Time magazine for “taking a stand” for corporate responsibility?
A corporation is not capable of benevolence. Give directly to the charity yourself, you’ll get a sticker and sometime a free pen.
Give directly to the charity yourself, you’ll get a sticker and sometime a free pen.
Lol. I can confirm, it’s true!
Joking aside, some of my most cherished possessions are hand-written thank-you notes from worthwhile causes that I support.
(Especially ones from children! “Donors Choose” is great when I need some crayon drawn notes in exchange for buying some school supplies.)
(And given the context, I should clarify, from my own money, not someone else’s.)
The “kick back” is good PR.
And decision-makers at that company feeling good about themselves at no cost whatsoever for the company or themselves.
exactly
its not really charity if you don’t give something up
They really should match all donations.
The C-level executive should match all donations. Otherwise that’s money that should be going to improving conditions for the workers.
And, if it’s a big enough portion of the charity’s funding, influence over the charity. But not tax breaks.
Also the political/social influence is real. Why bribe the government when you can outsource it to you and say it’s for a good cause. But the reality of the situation is they are giving a politician what they want and if the politician do something they don’t like they can move that “donation” to someone else.
The kickback is also in saying that they donated the money to charity … which was collected from other people
It’s like I asked you to donate money to a charity and I said I had to be the one to collect it … then I take your money and donate it in my name … basically, I took your generosity and claimed it as my own.
In many cases company’s also understand that they can’t openly do this because it would be too obvious … instead they just ride the generosity gravy train … they encourage people to donate to charities through their store/company/business … then the company may or may not give their own contributions but they get to attach their name to the donated amounts.
It’s like a billionaire selling you a can a beans and then asking you to donate a penny to a charity … I always say no because the idiot billionaire could spare 1% of their wealth and give millions of dollars to charities everywhere, why the hell are you asking me?
I never give to charities through a store/company or business … I give directly to charities on my own.
I hate how charities are run by rich assholes who pay themselves or their family and friends 6 to 7 figures while doing very little to actually help people
Company launches marketing campaign about how much they raised for charity …. Company matches donations and get relief on that……
NEVER give to charity through a corporation.
If they match donations, they are entitled to a tax break on their own donations.
The only issue with matching is that you don’t have a say in the charity. Do your homework. If it’s a legitimate charity, then it’s better to donate through a company that matches donations.
Couldn’t the CEO of the nonprofit be the spouse of the CEO and make a huge percentage of what they donate?
Not saying donating through a mega corporation is always bad, but I’d prefer to look into who I’m donating to rather than a split second thought at the end of a transaction.
this! the megacorporation receives 500k donations, which they transfer to CEO’s son’s “charity” that spends 99% of it on the said son’s salary. he buys another ferrari and the charity sends some flowers to a children cancer hospital.
Reminds me of something a criminal would pull.
Then it’s not a non-profit now is it?
Non profits can still have employees that get paid, they are just required to report who gets paid and how much (at least in my state).
Yeah obviously they have employees who get paid, but if a large portion of new donations just paid a CEO pay, that’s not exactly discreet fraud when the IRS comes around looking.
Yeah, because corporate charity is super regulated and never ever misused.
Never trust a corporation, period. Their incentives are to maximize profits from whatever revenue streams they have, no matter what they tell you. There are ways they can do this that are at least in the gray area of legality,such as:
A class-action lawsuit was filed against CVS Health Corporation (CVS) in May 2022 accusing the company of “deceptive fund-raising in a campaign it held for the American Diabetes Association,” according to The Boston Globe. Also according to The Boston Globe article, “Prior to each customer’s transaction, a checkout screen prompts the customer with several options for pre-selected dollar amounts, as well as an opt-out option, allowing donations to the diabetes association. Yet, the plaintiff alleges, CVS did not forward donations to the diabetes association, but instead applied the donations toward a legally binding $10 million obligation CVS made to the diabetes association.”
Side note: I’m not an expert on these donations or anything, but rather the practice of corporations exploiting everything they can is so predictable that I knew all I had to do was search…
https://taxpolicycenter.org/taxvox/who-gets-tax-benefit-those-checkout-donations-0
Tldr: no, it doesn’t work that way. They can’t get any tax breaks from your money.
I’ve been told since you donate it’s a tax write off for yourself and therefore the company can’t double write it off on theirs. Not sure I believe that these companies follow the rules but that’s what I’ve been told.
What you were told isn’t true. Both you and the company are able to write it off.
Most Americans aren’t donating enough for it to affect their taxes, though.
Lol a donation cannot be written off by two entities. Americans would need to itemize their deductions, which very few do.
The company does not write off the donation. It’s not their donation, it’s your donation. The company is a collector only.
Site the more correct wording would be “neither the customer nor the company are taxed on the donation”. Assuming the customer itemizes their taxes, which a you’ve pointed out is rare.
I’m trying to speak at the level of people who post stuff like the OP. Some of the details don’t shake out correctly but I’m not trying to get in the weeds of US tax code here if the main point holds up.
When you make a donation, you will get a receipt for it and that’s what you use to declare it on your taxes.
The company taking your donation will have a copy of that receipt showing that you made the donation and not them.
do they even get tax breaks from that?
No
When this happens you get a the receipt showing your donation to these charities. They can’t take a program, where they collect donations on behalf of others, and then claim that intake was part of their income. This is something they use to put feel good PR in their ads, and cynically act like they do anything worth while for these people. They don’t get a tax break for it though.
You don’t donate because you don’t want to give a mega corporation the benefit of tax breaks
I don’t donate because I want to keep those starving starved
We are not the same
Starving children murdered my family
and that’s how you lose your job.
Not sure why you got down voted. Pretty sure that classifies as insubordination.
Because I feel like some on here have the freedom to speak their mind and not worry about having food on the table tomorrow.
I was thinking the same thing
and let me be clear, I am for having a voice to speak out, but there’s a point where it’s like “ehhhhh I might be going a bit too far with this”
So sick and tired of this myth, how are Americans so goddamn ignorant of their own tax system that this continues to persist.
Because we’re Americans. Ignorant is kind of our power play! We’ll angrily defend a position we know nothing about, and then call YOU wrong for being well versed on the matter.
Ha! I’m going to retort one example of an extremely rare edge case, and that invalidates your entire argument!
Because when someone has been lying for a long time, any truth they might tell would be assumed to be lies, any good deed would be assumed to have an ulterier motive.
“Boy who cried wolf” basically.
This myth is probably prevalent because corporations have spent the last 40 years squeezing every cheat and every advantage they can out of the system — to the point where anything that even smells like a “good gesture” is rightfully met with suspicion and contempt from the people they’ve been so blissfully exploring.
I know people who still repeat the line that earning more money will push them into a higher tax bracket and they’d end up with less money than if they stayed at their current income.
Oh man don’t even get me started on that one too. I knew some people that genuinely thought a bonus would make them earn less overall.
If i was a manager and someone turned down a raise/bonus because “tax” reasons, i would seriously evaluate my own managerial skills…
Like, how did i not notice this person is a complete moron and why did i offer them a raise?
So, there are some misconceptions about this on both sides. While some may misunderstand how tax brackets work, there absolutely are certain income thresholds where barely going over a certain amount will net you less money overall.
Edit: To clarify, you should accept the raise. In most cases all you need to do to avoid “losing money” at any of these points is to lower your AGI by contributing to an IRA, 401K, etc.
For example (using 2025 numbers here for a single filer):
- EITC (Earned Income Tax Credit) @~$50k (if you have 1 kid) you miss out on a $4k tax credit. So there’s no point to getting a raise that puts you between $50k and $54k (don’t actually reject the raise, just make sure you lower your income by contributing to an IRA or something like that). https://www.nerdwallet.com/article/taxes/can-you-take-earned-income-tax-credit
- IRA Deductions @ $79k you start to lose out on IRA deduction benefits https://www.nerdwallet.com/article/investing/what-is-a-traditional-ira
- Medicare Premium Increase (for those on medicare)
@ $106k your medicare tax increases by $888, so you don’t want a raise that puts you between $106k and $~107k
@ $133k medicare tax increases by $1.3k, so you don’t want a raise between $133k and $134k
@ $167k medicare tax increases by $1.3k again
@ $200k medicare tax increases by $1.3k again
@ $500k medicare tax increases by $444… https://www.nerdwallet.com/article/insurance/medicare/what-is-the-medicare-irmaa
- Roth IRA @ $150k you start to lose out on benefits from having a Roth IRA @ $165k you can no longer contribute to a Roth IRA, so if you’re close to this limit, you’re going to do what you can to stay under this income bracket as much as possible (contribute to an HSA, 401k, IRA, etc). https://www.nerdwallet.com/article/investing/roth-ira-contribution-limits
- Child Tax Credit @ $200k you don’t get as much of a child tax credit, but luckily this drops off fairly slowly at a rate of $50 per $1k that you exceed that $200k limit. https://www.nerdwallet.com/article/taxes/qualify-child-child-care-tax-credit
There are probably a few other taxes/credits I didn’t include, but this is just a quick example with what I could look up at the moment.
Isn’t this possible? Tax brackets for 2024 I thought for single filer is 24% below 191k and 32% over 191k, isn’t it?
In places with marginal tax brackets, no. The numbers are different where I live, but the principle (hah) is the same:
If you earn 291k a year, the first 191k is taxed at 24%. The money left over (100k) gets taxed at 32%. So if you get a raise or bonus, the “tax problem” is only that your extra money is immediately taxed at 32%.
The higher rate gets charged only on the portion above the threshold. So with those rates someone earning 192k pays ($191k * .24) + ($1k * .32) = $46,100 not ($192k * .32) = $61,400.
Where you can be worse off earning more is if it puts you over a threshold for some social services (food stamps for example) with a hard cutoff rather than progressively lower benefits.
maaaan! you must come from a country where the laws actually protect customers from the corporations rather than the other way around… otherwise you could never come up with such a naive statement.
how are Americans so goddamn ignorant
It’s what we do best
I don’t know much about this. How is this not “one of them”? It seems to be like one of them.
The company doesn’t get any benefit at all on its taxes by collecting donations from customers. Those donations belong to the customers, who themselves can claim them on taxes. The company is doing a good thing by encouraging and soliciting charity.
how are Americans so goddamn ignorant
I mean did you see who we just elected?
Oh shoot…I missed it. I DVR’d the election results, and never got around to watching it. Don’t tell me! No spoilers! I want to see if it we finally elect our first black president. It’s Obama vs McCain.
…also, I’ve been in a coma for a while. 2024, huh? Do we have flying cars yet?
Nah but we got the hoverboards in 2015 as predicted by BTTF.
they were neither boards nor did they hover
My gym took $2 from everyone’s account in a once off for charity unless you opted out.
And then bragged about all the money they raised in their marketing.
Yeah, by illegally stealing it from members
Gym’s. The original shitty subscription company.
