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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.
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.
Yeah, because corporate charity is super regulated and never ever misused.
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.
The “kick back” is good PR.
And, if it’s a big enough portion of the charity’s funding, influence over the charity. But not tax breaks.
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 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.
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!
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.)
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 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
They don’t even report it as income, because it’s not income. It’s your donation, not the company’s donation.
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.
So sick and tired of this myth, how are Americans so goddamn ignorant of their own tax system that this continues to persist.
Corporations are evil for a million and one reasons. This isn’t one of them.
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.
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.
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?
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.
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.
how are Americans so goddamn ignorant
It’s what we do best
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.
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.
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.
