this post was submitted on 17 Nov 2024
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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.
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 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.
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!
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 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.
Sure, but that's not a tax write-off as originally said. Stick to the things that are actually things.
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.
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.
Frequently yes it is. Look into celebrity charities. Frequently they have a family member running it and most of the employees are family or friends. Most of the money goes to family with at most 50% going to the actual cause.
They don't even report it as income, because it's not income. It's your donation, not the company's donation.
Yeah, because corporate charity is super regulated and never ever misused.
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.
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