Check-out Counter Charitable Contribution

[Ericandblueboy]

No matter where you go, whether it's the grocery store, fast food joint, or the Smithsonian Zoo, you may be asked whether you want to donate $1 to such and such charity.

As a tax lawyer, this galls me.  If you donate $1 to charity directly and you itemize, then the charity gets $1, you get $1 of tax deduction (provided you itemize), and Uncle Sam basically chips in the income tax you would've otherwise paid.

But if you give $1 to Safeway, the charity still gets $1, but it's Safeway who now gets a $0.3 to $.35 in tax benefit.  So when a retailer solicits you for a donation, they're really asking you to give it 30 to 35 cents per dollar donated.  

When it's the charity such as the zoo asking for the money, you're simply missing out on your deduction.

Give directly to a charitable organization!

[DannyNoonan]

That's a good point. We have seen an increase in the channels available for donating to charities, like "text XYZ to this number to donate $10", which I suspect are charities' attempts to capitalize on the desire of people these days to be able to instantly express their feelings/views/stance on a topic. Texting a donation to a cause or saying yes to the clerk at Safeway is a way of instantly gratifying that desire to like/dislike in real-time. I bet it has worked out well for the charities that use these channels. It's a shame that it's not a benefit to those donating as well. I will keep your advice in mind and make donations to the charities themselves. 

-Sean

[sheldman]

On 9/14/2017 at 10:19 PM, Ericandblueboy said:

No matter where you go, whether it's the grocery store, fast food joint, or the Smithsonian Zoo, you may be asked whether you want to donate $1 to such and such charity.

As a tax lawyer, this galls me.  If you donate $1 to charity directly and you itemize, then the charity gets $1, you get $1 of tax deduction (provided you itemize), and Uncle Sam basically chips in the income tax you would've otherwise paid.

But if you give $1 to Safeway, the charity still gets $1, but it's Safeway who now gets a $0.3 to $.35 in tax benefit.  So when a retailer solicits you for a donation, they're really asking you to give it 30 to 35 cents per dollar donated.  

When it's the charity such as the zoo asking for the money, you're simply missing out on your deduction.

Give directly to a charitable organization!

I am not a tax lawyer.  But are you really sure that the bolded part is right?  If so, it would be such a bizarre corporate give-away that it would make an easy cause for a crusading politician or reformer. And it just doesn't make sense given basic principles of US taxation: for what you say to be true, it would have to be true (wouldn't it?) (1) that (e.g.) Safeway doesn't have to declare the donations as income (or whatever the corporate tax analogous word is) but does get to declare the donations-passed-through as deductions - which is crazy, and (2) that Safeway's marginal tax rate is about the same as the top individual marginal tax rate (and that's not true, is it?).

[Ericandblueboy]

I would bet Safeway isn't declaring any income since it didn't receive any cash for its own account.  Safeway is literally giving away cash and will likely get a receipt from the charity which would substantiate its tax deduction.  Current top corporate rate is 35%.