Coins in the donation jar, who gets the tax deduction?

February 16, 2011 6:53:23 PM PST
Giving to charity is always a good thing, but knowing where and when to give can make your money go a lot further.

When someone donates to a charity through one of those jars sitting on the counter at a business, who gets the tax write-off? The subtext of that question is this: Are businesses doing good so they can financially do better?

You go through the grocery checkout and there's a canister sitting there so you can give, or maybe the clerk asks if you would like to donate. You go through the drive-up and there's a receptacle hanging on the wall, so you can donate to those less fortunate. It is easy to give this way, but is it smart?

Does for instance, Safeway get a write-off for your donation?

"We don't," said Susan Houghton of Safeway. "We encourage our customers to take the tax donations."

Houghton says the 1,700-store chain raises millions of dollars a year and takes not one cent in write-offs.

"On your receipt it will say 'donation' and we encourage customers to save those donation receipts and use them for their own taxes," she explained.

Over at McDonald's they are serious about this, too.

Asked if they receive a tax write-off, McDonald's owner/operator Kimberley Byrne and president of Ronald McDonald House Charities of the Bay Area said, "Absolutely not. We don't touch that money at all. That's our customers' money and that's there donation and that goes directly to the Ronald McDonald Houses and care mobiles."

And by 'directly' she isn't kidding, a third party picks up the money.

"Oh no, we never touch it," said Byrne. "It's got padlocks on the back and we can't get into it. If you drop your credit card in there I'll have to call somebody to come open it up."

"The company itself doesn't get the write-off because it's not their money that's being given. It's your money that's being given," explained Jesse Weller of the IRS. "You are the one who would be entitled to the write-off, if you have the proper records."

Weller says businesses can't legally take the write-off and often consumers can't either.

"Every cash donation has to have a written record -- either a bank record, credit card record, canceled check or a receipt from the organization -- that type of thing," he said.

No paperwork, no write-off. Pure charitable giving.

So you couldn't pick a better way of giving than through Safeway, McDonald's or other retailers who uphold their standards.


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