Sure, but they also get to advertise that they donated X thousands of dollars to charity, while the truth is that the actual donors get no tax benefits at all. And like OP said, I’d rather use https://charitynavigator.org/ to do my own research before giving money to a corporation to donate to some organization that may be mishandling their funds.
Yup, it’s not about stealing money it’s about stealing goodwill.
The customers at the grocery store don’t get thanked for donating $50 million to fighting awful childhood diseases, the grocery store does.
Then they can use that to argue they’re good for the community, and deserve massive tax subsidies when they go to open their next store.
Unrelated, I’ve talked with people who work in the corporate philanthropy part of a business, and they’re fine. They’re just happy to get to use their position to organize charity, even though they know the point to the business is goodwill not giving.
It’s other parts of the business that then milk that goodwill in incredibly scummy ways.
It’s about stopping centralized programs which would actually address public needs. “We don’t need universal healthcare, here’s a charity that helps people with the bubonic plague!”
And in the worst cases, it’s a grift for the wealthy. Where the charities exist to do scammy things like pay the founder to fly to luxury resorts to give a talk about why poverty is bad. Or to fund your family members solar manufacturing company. Or to put fuel into your church’s private jet so you don’t run the risk of catching demons from the public.
I don’t think that’s the intent behind it, but it’s certainly an impact.
Charity is a stopgap to a systematic solution to addressing a lot of problems.
Your local food bank isn’t bad, but it does hide the issue of food insecurity behind a solution that isn’t guaranteed to be available to everyone like UBI or expanded food stamp access would.
Those cruddy charities do exist, but I think usually businesses try to avoid them because of the risk of backlash. The people running the programs usually try to do what they can to pick good charities at the least, since it’s basically all the same to the business.
Not much that they can do about the CEOs spouse getting a spot on the charity board though.
Yes, but not guaranteed, and usually “somewhere else”.
Instead of avoiding paying $50M in federal taxes like a lot of people think, they might be forgiven $1M in taxes at the local level, pending some sustained employment level for some duration or another.
Point being, they’re usually not planning to do the charity to save tax money, but to gain goodwill. They definitely intend to use that goodwill to make or save money later, and a common way is “you want us in your community, don’t tax us in buying the land 🥺”.
They might also just use it for advertising so people forgive 5% higher prices.
#2 and 3 don’t actually happen since it can’t be recorded on the P&L.
The donation would get recorded to cash and offset to a liability account, probably something named Charitable Donations Payable likely with a subaccount for the specific programs.
Overall, the effect is essentially the same, though. Fwiw, I like to use the same comparison as you did to show to people how dumb this belief is.
The individual who donated at the register also is allowed to claim the donation when they file their taxes.
This is not how tax deductions for charitable donations work.
Sure, but they also get to advertise that they donated X thousands of dollars to charity, while the truth is that the actual donors get no tax benefits at all. And like OP said, I’d rather use https://charitynavigator.org/ to do my own research before giving money to a corporation to donate to some organization that may be mishandling their funds.
Yup, it’s not about stealing money it’s about stealing goodwill.
The customers at the grocery store don’t get thanked for donating $50 million to fighting awful childhood diseases, the grocery store does.
Then they can use that to argue they’re good for the community, and deserve massive tax subsidies when they go to open their next store.
Unrelated, I’ve talked with people who work in the corporate philanthropy part of a business, and they’re fine. They’re just happy to get to use their position to organize charity, even though they know the point to the business is goodwill not giving.
It’s other parts of the business that then milk that goodwill in incredibly scummy ways.
It’s about stopping centralized programs which would actually address public needs. “We don’t need universal healthcare, here’s a charity that helps people with the bubonic plague!”
And in the worst cases, it’s a grift for the wealthy. Where the charities exist to do scammy things like pay the founder to fly to luxury resorts to give a talk about why poverty is bad. Or to fund your family members solar manufacturing company. Or to put fuel into your church’s private jet so you don’t run the risk of catching demons from the public.
I don’t think that’s the intent behind it, but it’s certainly an impact.
Charity is a stopgap to a systematic solution to addressing a lot of problems.
Your local food bank isn’t bad, but it does hide the issue of food insecurity behind a solution that isn’t guaranteed to be available to everyone like UBI or expanded food stamp access would.
Those cruddy charities do exist, but I think usually businesses try to avoid them because of the risk of backlash. The people running the programs usually try to do what they can to pick good charities at the least, since it’s basically all the same to the business.
Not much that they can do about the CEOs spouse getting a spot on the charity board though.
So there is tax benefits, just with extra steps?
Yes, but not guaranteed, and usually “somewhere else”.
Instead of avoiding paying $50M in federal taxes like a lot of people think, they might be forgiven $1M in taxes at the local level, pending some sustained employment level for some duration or another.
Point being, they’re usually not planning to do the charity to save tax money, but to gain goodwill. They definitely intend to use that goodwill to make or save money later, and a common way is “you want us in your community, don’t tax us in buying the land 🥺”.
They might also just use it for advertising so people forgive 5% higher prices.
That’s not how it works either. You’re the one naking a donation, you get a receipt for your 50 cent donation that YOU can claim on your taxes.
The business getting you to make a donation doesn’t get to claim your donation.
Both you and the business can claim that as a tax deduction.
They absolutely cannot.
#2 and 3 don’t actually happen since it can’t be recorded on the P&L.
The donation would get recorded to cash and offset to a liability account, probably something named Charitable Donations Payable likely with a subaccount for the specific programs.
Overall, the effect is essentially the same, though. Fwiw, I like to use the same comparison as you did to show to people how dumb this belief is.
The individual who donated at the register also is allowed to claim the donation when they file their taxes.
That’s not how tax filing works. Your #2 is completely wrong that’s not considered income.
Are you retarded?
Confidently incorrect.