I’m thinking of where your donation goes to buy their own product for people needier than you.
An example is my local power company, MG&E,which raises money to help poor people pay their heating bill (pay to who? MG&E). It doesn’t say so, but probably the vast majority of that money goes right into MG&E’s bank account, though I’ll say up front I can’t prove it. I do know that they are the sole heating provider for a large part of this area, so it stands to reason they would pay themselves most of it to write off delinquint debts.
I have seen many others. Restaurants which raise money to buy meals for the poor. Airlines that raise money to buy airline tickets for poor people with family emergencies that require a flight, etc.
As far as I know, they’re completely legal. And I’m sure they do some good for some folks. I can’t even say it shouldn’t be allowed, but it sure irritates something in me. Gives me a bit of that, “Somebody’s trying to pull a scam on me”, feeling.
I can understand how you feel, but then again, what they’re doing is completely on the up-and-up:
These goods and services are needed by the people to whom they’ll be given
Companies like airlines and utilities wouldn’t exactly want to buy from their competitors-- what would be the point in that?
Their services DO need to be paid for, somehow. They’re being up-front about what they want to do. They really only have three optiopns: ask for donations to cover their costs for low-income people, and let people pay for it voluntarily; donate the services but then raise prices to cover the losses; or skip doing anything altogether.
I guess my point is that someone, somewhere, has to pay for the services, and these companies are doing some good and being honest about it. They are not profiting from it-- most document that their goods/services are given at cost – they’re simply not going into debt to do it.
Your tax dollars are paying for a program (LIHEAP) that helps low-income people pay for winter heat. What’s worse, the utility helping out or the government helping out?
If the donation is tax-deductable, then it would go into an escrow account; any interest earned will remain in the fund for payment. Further, they will have to report income and expenses; the IRS would take a dim view if they used any money in the fund for purposes other than paying people’s bills, and they’d have to provide paperwork for every disbursement.
There could be administration fees, but the website indicates that they do not charge them. In addition, it looks like the payment is needs based, plus it’s distributed by a non-profit agency outside of MG&E. It also doesn’t require MG&E to be the energy supplier (I don’t know the situation in your area, but if someone used coal or oil for heat, they could still get money).
In other words, this is perfectly legitimate and a fine example of corporate responsibility.