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View Full Version : Businesses that aggressively collect for charities. Do they get a cut?


Yarster
08-02-2012, 03:50 PM
Going to my local Vons Supermarket, I have noticed that in the past year they have not only increased the number of times a year they are collecting for various charities that are seemingly not in any way connected to the store, but are also doing so much more aggressively. A year ago, if they were collecting for breast cancer, they might have a poster up at the door, and when you gave them your rewards card, they might ask you if you wanted to donate a dollar.

Now there is a whole decoration campaign, a person jangling a cup with coins in it loudly asking people to donate, the card automatically asks if you want to donate a dollar when you slide it, to which you have to hit 'yes' or 'no' to proceed, and then the checker even asks if you want to 'round up' and donate your change to the cause. While all this is fine on an occasional basis, the number of charities they do this for seems to be increasing dramatically (or perhaps the aggressiveness is just more obvious). Between the various male and female cancers, muscular dystrophy and other neuro-muscular diseases, the poor and/or homeless, various world tragedies, and generic causes to give to other poor counties and the Red Cross, they have a campaign almost every week.

What surprises me is that the staff of the store is a big part of this process, leading me to wonder, do the stores get a percentage of the money they collect? Is there a tax advantage for them such that the store managers force the employees to do this? Or, am I really just that clueless and this is something the store is doing out of the kindness of their hearts?

I guess my suspicion comes from the fact that a year ago, it wasn't like this, the number of events they had were fewer, and these stores post giant signs on the outside telling you to ignore solicitors and other people outside their stores that are not sanctioned to be there and that they have no affiliation with the store. Ergo it seems strange to ignore the 'collect for the homeless' guy outside the store, while going in and getting bombarded by the store staff asking you to give to essentially the same cause.

Roderick Femm
08-02-2012, 04:09 PM
My local Safeway used to do this, and then they toned it down a lot. I don't know why, my suspicion is that a lot of people complained.

Sorry, I don't have a GQ answer for you. I'm interested to find out too.


Roddy

Yarster
08-02-2012, 04:19 PM
That's especially interesting because Vons and Safeway are part of the same chain of Supermarkets. Did you also notice it rachet up in 2012? While it is annoying, I'd feel like kind of a dick complaining about anyone raising money for a charity.

dracoi
08-02-2012, 04:19 PM
In many states, a paid fundraiser must register with the state. This would be one way to look it up. For example, WA state offers the following search form: http://sos.wa.gov/charities/search.aspx If you look up the charity in question, any paid fundraisers should be listed in their information.

However, I think most of these companies are NOT getting a cut financially. Nor is it just out of the kindness of their hearts. It's a way for Vons to say "We raised $10 million for cause X" without actually costing them any money. They get free advertising, press releases, good will, etc. as compensation.

rogerbox
08-02-2012, 04:40 PM
I used to work for Trader Joe's, and the customers often found the people begging outside annoying. I was told that they had to let everyone do that or no one, they couldn't pick and choose. It wasn't clear to me if this was because of a law or fear of litigation.

isaiahrobinson
08-02-2012, 06:39 PM
Here in the UK the way it normally works is that fundraisers don't technically get a "cut" of any donations, they get a fee per donation from the charity. So if you donate £20 the charity will get that £20, but the fundraiser will get paid £1 or £2 by the charity (for instance).

So, essentially, they take a cut.

muldoonthief
08-02-2012, 07:00 PM
However, I think most of these companies are NOT getting a cut financially. Nor is it just out of the kindness of their hearts. It's a way for Vons to say "We raised $10 million for cause X" without actually costing them any money. They get free advertising, press releases, good will, etc. as compensation.

Yes, it gives the CEO bragging rights with all the other CEOs on the golf course. Just like the United Way donations they extort out of their employees.

ClevelandProud
08-02-2012, 07:21 PM
Retailers do it as a “community service” effort.

Being a responsible retailer in the community.

I have seen employee bulletin board postings reminding cashiers that their fundraising effort (i.e., asking the customers if they would like to make a donation at the checkout) entitles them the chance to win something like an adult bicycle or a gift card for the most money raised.

So, there is an issue of competition amongst employees.

At the checkout, asking if you would like to make a donation, the money is organized in the collection effort (accounted for and documented).

bot3
08-02-2012, 07:36 PM
I also work as a cashier and associate for a local home improvement store and we also aggressively solicit donations for Habitat for Humanity. However, being aggressive is not the same as being pushy or being a beggar. Our clientele are very generous and we are able to joke about it and make conversation. Only once did I get a nasty racial slur about it. And because of that the next customer in line made sure to give a extra donation and made it very clear to all around. ;)

I can assure anybody who thinks that a business is skimming anything from a charity, is wrong! Now perhaps the charity might be dishonest or an individual employee could try to skim off it, but it can quickly be caught and the person(s) dismissed immediately. But not the business as an entity. Besides all donations usually go through the cash register as a transaction and is thus recorded as such.

And as others have said its a great way for a business to get good PR in the community.

DrDeth
08-02-2012, 09:26 PM
No, there is no "cut". (This has been asked and answered here a few times, but not recently, so no problem asking.)

But the PR is worth quite a bit. So, they are not being entirely altruistic, of course.

And ofttimes one company or division will get into a competition with another company or division, and many take that very seriously.

Duckster
08-02-2012, 10:00 PM
What I want to know is do these companies who collect your dollar donations on your behalf turn around and claim a corporate tax deduction for their own benefit?

DrDeth
08-02-2012, 11:31 PM
What I want to know is do these companies who collect your dollar donations on your behalf turn around and claim a corporate tax deduction for their own benefit?

No. Except for the matching part.

drachillix
08-03-2012, 12:45 AM
No. Except for the matching part.

I was under the impression that the post you quoted was exactly what they were doing, take in hundreds of thousands of dollars in donations then toss it to the charity. That way the store had no real loss of revenue, they just donated what the customers gave them.

It wouldnt really be any benefit because on paper its, took in $100K, donated $100K. Unless there was a way that the donation pool can be isolated from store revenues (i dont see how legally) then it could be donated without ever claiming it as money taken in, which would create a nifty tax benefit to the store because it would look like they just pulled that donation out of their ass.

I'm sure GAAP would not see this as kosher.

s0meguy
08-03-2012, 02:51 AM
It definitely sounds like a good way for those charities to incentivize businesses to do that. I know they do so with people that are asking for charity donations on the street, so why not businesses.

DrDeth
08-03-2012, 07:58 AM
I was under the impression that the post you quoted was exactly what they were doing, take in hundreds of thousands of dollars in donations then toss it to the charity. That way the store had no real loss of revenue, they just donated what the customers gave them.

It wouldnt really be any benefit because on paper its, took in $100K, donated $100K. Unless there was a way that the donation pool can be isolated from store revenues (i dont see how legally) then it could be donated without ever claiming it as money taken in, which would create a nifty tax benefit to the store because it would look like they just pulled that donation out of their ass.

I'm sure GAAP would not see this as kosher.

Like I said, they claim no net deduction for this.

Unless they advertise that "We will match the first $100000 in donations" in which case yes, they get to claim their $100000.

dracoi
08-03-2012, 09:37 AM
I was under the impression that the post you quoted was exactly what they were doing, take in hundreds of thousands of dollars in donations then toss it to the charity. That way the store had no real loss of revenue, they just donated what the customers gave them.

It wouldnt really be any benefit because on paper its, took in $100K, donated $100K. Unless there was a way that the donation pool can be isolated from store revenues (i dont see how legally) then it could be donated without ever claiming it as money taken in, which would create a nifty tax benefit to the store because it would look like they just pulled that donation out of their ass.

I'm sure GAAP would not see this as kosher.

No, GAAP would not see this as kosher. You can't collect money on someone else's behalf and then call it your income, even if you also show it as an expense. The money collected is held "in trust" and then distributed. The bottom line might be the same, but holding it in trust doesn't inflate income.

Because donations are made to separate cash boxes or are run through the store's registers, donations are accounted for with the same level of separate detail as any purchased items.

This is how sales tax is accounted for, by the way - money collected and held in trust for another party - so it's an extremely common issue in accounting.

Yarster
08-03-2012, 10:39 AM
Everything said so far makes sense, but what is so special about the past year that has increased the number of charities involved and the aggressiveness of the staff in getting the donations? Is it just a coincidence I'm noticing it more, or are there really more of them and more aggression as I originally suggested? Was there some change in the law, union rules, or other event I am not aware of that racheted up this activity to annoying levels in 2012?

Telemark
08-03-2012, 10:46 AM
Was there some change in the law, union rules, or other event I am not aware of that racheted up this activity to annoying levels in 2012?
I haven't noticed any significant change, so I'm going to go with confirmation bias.

rogerbox
08-03-2012, 12:32 PM
Also so many customers can't stand the deluge of being bothered to donate at the register and begged for money outside of the stores, I really think these are ONLY for CEO's to brag about amongst each other (also note that THESE people aren't the ones who have to bother each and every customer to donate), because they do NOT generate any goodwill for the store amongst the community. Customers constantly complain.

dracoi
08-03-2012, 01:21 PM
Also so many customers can't stand the deluge of being bothered to donate at the register and begged for money outside of the stores, I really think these are ONLY for CEO's to brag about amongst each other (also note that THESE people aren't the ones who have to bother each and every customer to donate), because they do NOT generate any goodwill for the store amongst the community. Customers constantly complain.

I wouldn't accept this conclusion unless you can point to surveys or studies that these drives actually hurt the stores. People love to complain, but they don't always do anything about it.

Another point to consider: When Target and Wal-Mart wanted to open stores in our area, they both pointed to very generous local giving campaigns as a point in their favor. The zoning issue actually went to a public vote, so the fate of those stores was decided by a lot of people who never have (and never will) shop there.

The Great Cornholio
08-03-2012, 02:20 PM
Here in the UK the way it normally works is that fundraisers don't technically get a "cut" of any donations, they get a fee per donation from the charity. So if you donate £20 the charity will get that £20, but the fundraiser will get paid £1 or £2 by the charity (for instance).

So, essentially, they take a cut.

They bid for the contract to be the primary fundraiser, so if you need a Dialysis machine for your local kiddies' hospital and the Govt has spunked all the cash on some running and jumping races in London, you put it out to tender. It's not necessarily the cheapest firm who gets the job either, it might be a quick campaign which is needed, or one which is very low-profile (which obviously makes it tricky, without over publicising). Some of these people then make nice fat pay cheques, laying into large corporations to get them to sponsor the new machine.

rogerbox
08-03-2012, 02:31 PM
I wouldn't accept this conclusion unless you can point to surveys or studies that these drives actually hurt the stores. People love to complain, but they don't always do anything about it.

My conclusion was that the drives exist so CEOs can feel good about themselves because they obviously DON'T generate goodwill towards the stores.

Number of people who have complained about getting hassled: many
Number of people who thanked us for getting hassled: None that I know of.

I didn't say the hassles hurt sales, I said they don't generate goodwill. Which they don't.

t-bonham@scc.net
08-03-2012, 06:09 PM
What I want to know is do these companies who collect your dollar donations on your behalf turn around and claim a corporate tax deduction for their own benefit?No, they can't claim these pass-thru contributions as their own donations -- their accounts know this would violate GAAP.

But some companies have tried to claim the time their employees spend on this -- asking customers, putting up posters in the store, accountant time adding it up and sending money to the charity -- as an n-kind contribution to the charity. So the few seconds the cashier is hassling you about thus -- the store tries to claim that time as a 'donation'.

I don't know how this has worked, or if the IRS let it get by so far.

Alley Dweller
08-03-2012, 06:23 PM
No, they can't claim these pass-thru contributions as their own donations -- their accounts know this would violate GAAP.

But some companies have tried to claim the time their employees spend on this -- asking customers, putting up posters in the store, accountant time adding it up and sending money to the charity -- as an n-kind contribution to the charity. So the few seconds the cashier is hassling you about thus -- the store tries to claim that time as a 'donation'.

I don't know how this has worked, or if the IRS let it get by so far. The stores get to deduct the salaries they pay to their employees whether the employees spend their time soliciting charitable donations or soliciting sales (unless there has been some dispute over whether time spent soliciting donations is an "ordinary and necessary" expense that I am unaware of). I would be amazed if anyone managed to deduct an employee's salary twice because they spent their time soliciting donations.

ClevelandProud
08-03-2012, 06:41 PM
Dateline Cleveland, Ohio, June 2012 …

HARVEST FOR HUNGER CAMPAIGN SETS NEW RECORD

15,010,760 million meals announced at recognition ceremony today!

"CLEVELAND, OHIO - June 19, 2012 – The 2012 Harvest for Hunger Campaign cochairs Ken Marblestone, President, Charter One and RBS Citizens Ohio and Albert Ratner, Co- Chairman of the Board Emeritus, Forest City Enterprises announced the results of this year’s Harvest for Hunger community-wide food and funds drive at a ceremony today with Anne Goodman, Foodbank President & CEO.

Mayor Frank G. Jackson also attended the event to thank supporters.

The campaign raised a recordbreaking $3,673,015 million for local food pantries and soup kitchens.

The success of the campaign was due in large part to “Check Out Hunger,” a cashier-led fundraising effort in grocery stores across the region during March.

In Greater Cleveland, Giant Eagle, Heinen’s and Dave’s collected gifts from customers at their cash registers for the Harvest for Hunger campaign.

Collectively, the supermarkets raised $1,347,125. ..."

http://www.clevelandfoodbank.org/site/DocServer/Harvest_2012_Release.pdf?docID=5541

+

“Check Out Hunger” …

What was so great about this fund raising drive was the approach.

At the grocery store checkout, there were small tear pads.

Each tear pad was a dollar amount donation (i.e., $1.00, $2.00, $5.00, $10.00) with a corresponding barcode.

A customer wanting to make a donation would detach one of the tear pads and scan the barcode at the time of checking out.

That dollar amount donation was added to the checkout total and paid by the customer.

sundaystretch
11-01-2012, 07:48 PM
Vons is engaged in an organized Campaign to trick customers . I confronted the local store, Corporate office and Charities involved. All denied and all pointed fingers at each other. All you have to do is
google" Vons Charity" and you'll see what they are doing to customers.

Vons should be ashamed at their scam of repeatedly asking paying customers to give a donation to the charity of Vons' Choice. I was donating a dollar each time I shopped. I stopped after hearing a radio talk show complain about this practice of shaming the customer into donating. The next time I was in the store checking out, I selected "decline to give to a charity" I thought that would be the end but the cashier stopped the completion of the transaction and held my receipt hostage while asking me to give once again. I politely declined then she said we can "round up " meaning if my bill was 25.70, I would agree to pay 26.00 for the third time I politely declined . She reluctantly released my receipt and allowed me to leave. Vons is determined to force, bully or shame you into giving. I will NEVER give a cent to a Vons sponsored charity. I also will boycott any charity they were forcing down my throat. Here's how the scam works: The guy bagging the groceries asks you over and over if you need help out, at the same time the cashier asks you for a donation then she asked if you found everything ok, then the , guy bagging asked another question then the cashier starts "rounding up your bill pretending she has your approval then the guy bagging distracts you again and you have to force the cashier to STOP adding donations to your bill. The Cashier and the guy bagging fire off a barrage of questions, it's part of the SCAM to Confuse , Distract, Disorientate and Bombard the customer , while desperately trying to ADD money to the bill. I was so insulted by the behavior, I went in the following day to video tape it and I have this lady on video trying to force me to donate, while the guy bagging is asking over and over if you need help out. He asked 3 times. It's a coordinated scam and Vons corporate has instructed the staff to engage in customer abuse, harassment and fraud. Can you imagine how an elderly person survives this onslaught? Shame Shame Shame! Shopping should not include aggressive panhandling at the register. It's so sad, the homeless beg in front of the store and cashiers beg inside. It's not good enough that we shop there. Never Again , Vons Never Again………Full Boycott!!!!!