If I’m in the checkout at a business, say McDonald’s or Walmart or Kroger or whatever, and they ask if I’d like to round up to donate to some charity, I usually say yes. But should I be doing this? I heard somewhere that I shouldn’t because they can claim that as a donation from them which contributes to them paying less taxes or something, I’m not sure if that’s 100% how it works but I figure that it benefits them somehow or why else would they do that?
Don’t do it.
Some credit cards/bank services will round up your purchases for you and save whatever extra in a savings account. See if you can do that for a 1 year and see how much money you’ve been giving away.
How are we defining “worth it?”
EDIT: THIS IS INCORRECT, the business cannot deduct your donations.
Yes, the business can claim it as a deduction on their taxes. If it’s a business you like, maybe that’s a good thing, if it’s not then that may be a bad thing. Does the money that goes to charity outweigh whatever harm may come from that company paying less in taxes? I don’t know if there’s any good way to objectively say that.You don’t really get much say in which charity that money goes to, it’s just going to whatever charity that company has chosen to partner with. Some charities can be kind of sketchy, not all of them are on the up-and-up. If it’s a cause you care about, you may be better off just donating directly yourself to a charity you trust.
Now your individual contributions doing this are really a drop in the bucket, let’s say you go to a store and donate at checkout 3 times a week, and since you’re rounding up to the nearest dollar, you’re donating a max of $1 × 3x a week × 52 weeks a year = a maximum donation of $156 dollars a year donated by rounding, probably going to several different charities, and realistically you’re probably donating about half of that unless you have some real OCD about your purchases being even dollar amounts, so probably about $78/year divided up among however many different charities the various places you shop at are involved with.
Now of course you’re not the only person making those donations at any given store, each store is probably making hundreds or thousands of dollars in donations between all of their customers rounding up their checks.
Unless you’re really struggling, you’re probably not going to miss the maybe $100 or so that get siphoned off from you making these donations spread out over a whole year.
Can you Deduct those donations from your own taxes? I’m genuinely not sure, my gut says no (EDIT: you can), but let’s say you can. Do you think that $100 or so + whatever other deductable expenses you have in a year are going to beat the standard deduction? If it does, then sure, feel free to save those receipts and try to add it all up, that sounds like more trouble than it’s worth to me, but maybe it’s worth it for your purposes, there’s a lot of different tax situations I won’t pretend to know for certain.
Are those charitable donations going to improve your life? That’s hard to say, I don’t know your life. EDIT to expand on this a bit Are you in a position where you’re going to benefit directly from a charity? If you are you may need to reconsider making a donation because you may need that money yourself. Although there are cases where a charity may be able to make better use of money than an individual, for example being able to pool money from donations to buy things in bulk at a better price, but you’d have to know how that organization is ran and how the money is going to get used to determine whether you’ll be able to benefit from that directly. Indirectly maybe you’ll see some benefits but probably not immediately and it probably won’t be immediately obvious. Maybe donating money now to a charity that supports youth sports leads to some kid taking up baseball who wouldn’t have been able to afford to otherwise which in turn keeps him off the streets, gets him scholarships, etc. when otherwise he might have ended up in a gang or hooked on drugs or something and broken into your neighbors car 10 years down the line to steal some change which resulted in your insurance rates going up because your in a “high crime area” or something. Or maybe it will just give you a warm fuzzy feeling inside.
the business can claim it as a deduction on their taxes.
Going to stop you right there and say, No the business does not take your contribution and offset their own tax liability with it.
The whole partnership with charity is purely a feel good transaction.
On further research, you are correct. I’ve heard the thing about it being deductible for the business repeated enough that I thought it was true. Guess that’s just a reminder to always be fact-checking. I will be editing my comment accordingly. I do feel like the rest of my comment still has some value on how to determine whether it’s worth it or not.
Thank you for pointing out my wrongness.
Not to worry mate.
Donations are more aligned with my beliefs when I can choose the charity.
And my country gives smol tax breaks for donations to charities. So I can get some cash back at tax time. I don’t get those at the check out.
That’s pretty much how it works. I don’t know if it’s really a should/shouldn’t conversation per se. Money is still getting donated to the needy, it’s just also kind of undercutting what the company should be doing in terms of taxes and stuff. And some people just can’t get themselves to make the time to donate directly.
That said, 100%, if you can get yourself to make the time to donate directly to a cause, that is absolutely undeniably better than letting the company do the roundup thing and you should totally do that instead.
