I wasn’t going to comment initially but, thinking again, I will.
According to what I was once explained, the scheme runs like this.
a) organization X starts a fund raising campaign
This alone can be deducted as an expense, as any amount of hours can be attributed to planning, preparing, etc, the entire thing.
As this time as no profitable end, it can be deducted.
b) You donate. But now it’s their money.
Your money is siphoned to a separate bank account or just tallied and earmarked as for charitable purpouses but this does not mean the entity needs to hand it over immediatly.
That money is held within the company’s vaults, figure of expression, and, as such, counts towards the overall financial assets of the company.
It still needs to be handed to the end recipient but until it does it can be used to leverage loans and be invested into short term investment products, like overnight deposits (with hundreds of thousands or even millions it does gain interest overnight).
c) the money gets donated eventually but not by you
Eventually, all that money gets handed over but it is now their money, not yours. And as such, they get the tax deduction. And, again, with hundreds of thousands to millions in donations, the deduction gets very high.
This deduction, on your expense, goes towards clearing more of their profits.
Want to do something good?
Volunteer. Help your neighbour. With your own efforts, actions and work. Don’t hand over money.
hardtrip@lemmy.ml 1 month ago
The reason they ask for donations is because they can pool the donations together, say they’re donating, and then get a tax write off. They are just trying to make free money.
ImplyingImplications@lemmy.ca 1 month ago
This is a commonly repeated myth but it isn’t true. Nobody gets a tax write off in point-of-sale fundraising. Charities ask stores to do it because it’s one of the most efficient and effective ways for a charity to raise money. Chairty events are costly, and asking people on the street gets a lot of rejection. Stores agree to do it because they get to run ads saying they helped raise millions for charity and the charity will usually shout them out as well.
Ethalis@jlai.lu 1 month ago
I work for a retailer and have been loosely involved in a project like that a few years ago.
Basically, it felt like it was mostly a very inexpensive way for the company to get everyone involved feel like they were making a good action. The free advertising was definitely an argument to get the higher-ups on board, but my impression was that it was kinda secondary compared to the kinda fake good conscience it gave everyone.
There was definitely no tax breaks for that initiative though, so at least in my country that is indeed a myth
scott@lemmy.org 1 month ago
They still take credit for it like you said.
RattlerSix@lemmy.world 1 month ago
I’ve always been curious how the money gets to the charity. Does the corporation put the donations into an account and collect interest on it before they give it to the charity?
hardtrip@lemmy.ml 1 month ago
Damn, I didn’t know I was duped. I do wonder how this holds up in countries other than the US.
alexc@lemmy.world 1 month ago
Don’t forget the press release they can also make saying how nice they are for donating, too…
entwine413@lemm.ee 1 month ago
You should delete your misinformation.
NikkiDimes@lemmy.world 1 month ago
No, they should leave it up as it is immediately debunked in the next comment, which is good.
Shardikprime@lemmy.world 1 month ago
Yeah they won’t. Lemmy is very lax when dealing with published falsehoods which are in support of an ideologically needed narrative.