It’s pretty common to see, next to the cash register in a store or restaurant, a box to collect change for some charity or another. I often will toss my spare change in there. There are also stores/restaurants that will ask if I want to add a donation amount to my bill.
Because it’s a cash donation and anonymous, I can’t take that as an itemized tax deduction. But can the company, after it’s taken my 50 cents and all the other donations, count the total amount as a tax deductible donation? Are they getting a tax credit for my small donation, since they are the ones writing the check to the charity?
Not only is the corporation taking a tax deduction with your donation, they’re likely keeping a non-insignificant percentage of it as “administrative fees.”
I can only give you an anecdote. My uncle owns a restaurant that for many years had a cardboard charity sign that allowed people to stick donated quarters into a paper slot. His involvement was limited to letting the charity leave the sign there and, if the sign got full, calling them when so they could replace it. He never counted the coins and I seriously doubt that he took a charitable donation for it. It was just a nice thing he did for the community. I think it was for the Easter Seals but I can’t find a picture of the sign online.
Pictures online make it look like most charity collection boxes are locked. There is no reason the store or restaurant where you find it has to have the key. In fact, I volunteer for a charity that uses collection boxes on its own sprawling property and the only people with the keys to the boxes work in the charity’s treasury. I doubt the people in the restaurant are counting the money for most of those collection boxes.
I’ve done volunteer work for local animal shelters picking up the change bins from restaurants. They never have the faintest clue how much is in the barrel, nor do they care. No deduction. DCnDC doesn’t know what he’s talking about.
My apologies. I thought we were talking about the checkout register “Would you like to donate a dollar to [insert charity]?” [del]scams[/del] campaigns.
You know what? It’s apparent that I spoke out of turn and responded with incorrect information before doing any proper research.
The information I’ve found online mostly agrees that while some large corporations will shift donations over to their own charitable organizations and take an administrative fee, e.g. Petco, generally companies are very careful to never mix customer donations with profits to minimize any perception of impropriety, and hand over 100% of the money to the intended charitable organization. They generally cannot or will not take a tax deduction for donating money collected from customers for charity unless they engage in some sort of fund-matching.
I so stand corrected and apologize for posting misinformation.
I’m guessing here, but if the restaurant counts the donations as gross revenue … then they can deduct the amount donated … whether off of gross income or net income I don’t know. Looks a lot simpler to donate as an individual on the schedule A, as per IRS Pub 526 - Charitable Contributions {PDF}.
Charity boxes, locked or not, are handed over untouched here. It would be stupid act to risk being caught robbing one for the small amounts involved.
Tax relief on charity giving is different here: If the donor is a tax payer, and gives the charity their name and address, the charity can claim the tax that was paid on the donation. If I give £1, the charity can claim an additional 20p from HMRC. In practice, no one checks that the names are genuine, or if they paid tax on the gift.
Anonymous sums in boxes are not allowable for relief.Our church tries to encourage members to use envelopes or regular payments so that they can take advantage of this - it adds up over a year.
For national chains which donate to national charities, how do they manage getting all the change to the charity? Local charities can have someone come by periodically to collect the change, but what about 7-11 collecting for MS, McDonalds collecting for Ronald McDonald house, etc. It seems like it would be unmanageable to have charity representatives nationwide collecting money.
Perhaps they just count the money in the collection bin and report the amount to management, which then cuts a check for the regional or nationwide total?