HOUSTON – You’ve probably had this happen while shopping - stores ask if you want to round up or add a couple of bucks to your total for a charity. Recently, CVS was sued over its checkout donations. So we wanted to know where that money actually ends up and who benefits from it.
Register donations really do add up
60 cents here, 2 bucks there, and charity donations at the checkout add up. Many retail stores have started point-of-sale fundraising campaigns in recent years. This year in just one month Walmart raised $33 million for Children’s Miracle Network.
Walgreen’s Red Nose Day, a charity to help fight childhood poverty, raised $37 million, most of it donated at the register.
But, CVS was recently sued for how the retailer handled register donations to the American Diabetes Association. The money did go to the charity, but the lawsuit claims CVS did not forward donations directly to ADA. Instead, it says CVS applied it to an obligation they already made.
“Well anytime there’s a middle person in between your donation and the charity there is a little bit more of a risk that your donation won’t get to the organization or that it won’t get to the organization and a timely manner,” said Laurie Styron, Executive Director, CharityWatch.
Are stores just using customer donations for their own tax write-off?
“If everything’s above board that store really just acting like an agent,” said Styron.
A few of you asked us about this, so we asked Laurie Styron of CharityWatch if retailers are using customers’ donations for their own tax write-offs.
“They’re really just taking your money and at some point in the future passing it on to the charity if they’re filing their taxes correctly. It actually doesn’t have any impact on that store’s taxes,” she said.
She says you could get the receipt and use it to write off the donation on your taxes.
“Most people don’t,” said Styron. “It’s typically such a small amount you’re talking about cents or a dollar and most people aren’t going to go through the hassle of writing that off on their taxes.”
To make it worth your while, it’d have to be more than the standard deduction, which stands at almost $13,000 for single filers and almost $26,000 for married couples.
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What does the charity do with the money donated at the register?
Charities typically won’t have line items specifically showing the money that came in from register donations. You can see what they do with all donations by looking at public financial reports.
“It really is important for you to do some research on your own as a donor,” said Styron.
You can do that research on CharityWatch where charities get an A through F rating, looking at several factors including how they spend donations. It is important to know what you are looking at when you start doing charity homework.
What if I see a charity not giving 100% of donations to people in need?
Styron says you actually should see charities using some of the donations to run the organization. There are some guidelines you can look out for.
“Top-rated charities spend at least 75% of your donation on their programs and they keep their fundraising ratio down to about $25 or less to raise every hundred dollars of public support.”
Here’s an example:
These financial reports and breakdown of donations can be found on CharityWatch.
Do small donations at the register really even matter?
And if you’re doubtful of how helpful your spare change really is to a charity, look at the Houston Food Bank. “Cause marketing campaigns” like small checkout donations totaled nearly $1.5 million dollars to the food bank just since January.
“It’s the really big donations that get the attention. But the reality of most of the money is the small amounts that are coming in that over time really add up to a lot,” said Brian Greene, President of the Houston Food Bank.
For example, right now on the food bank’s website, you can buy a $10 card that will help provide 30 meals for people in need in our area.
“Most nonprofits count on the holidays for the bulk of their charitable giving this is where it’s kind of your make or break it time of year. So it’s a big deal for all of us,” said Greene.
How to find the best charity for your donation
You may want to search for a charity that aligns with your interests. Places like CharityWatch, Give.Org, Charity Navigator, and the United Way Houston have options where you can search topics and find charities related to those topics.