Itâs Actually Ok To Round Up At Checkout
I keep seeing posts about how you shouldnât round up your payment at checkout âfor charityâ because the company takes the money, gives in their own name, and then receives a tax break for the donation.
This is incorrect. Itâs just plain wrong information.Â
Because itâs illegal for a company to claim collected donations on their taxes, since they give you a receipt that proves you can claim it on yours. They are considered a collection agent â the corporate equivalent of a firefighter with a boot soliciting on the sidewalk.
And the sentiment is potentially fucking nonprofits out of serious change.
So hereâs how it works. When you make a purchase youâre asked if youâd like to round up your price, say $22.70, to $23 and give that extra 30 cents to charity. When you choose yes, the company adds that as a special charge, and transfers the amount to a processing company. The processing company disburses many small gifts in one big chunk to the nonprofit, so that the nonprofit doesnât get ten thousand transactions of thirty cents. Over the course of a couple of years, campaigns like this can raise millions for the nonprofit.Â
So whereâs the catch? youâre thinking. Capitalism doesnât allow kindness like this to rampage unchecked!
Well, youâre kinda right. For one thing, thereâs something called the Halo Effect, where companies get a huge PR boost from this giving. People feel better about themselves and the place they give, when they give this way. Thatâs why companies do it, pure and simple. Itâs cheap, built-in positive messaging.Â
The companies arenât deducting it (itâd be chump change to them anyway tbh) but you can. You can literally deduct the thirty cents you gave at Jersey Mikeâs off your very own taxes, if you keep the receipt. But unless youâre giving more than $6K to charity each year ($12K if youâre filing jointly!) then thereâs no point keeping that receipt, because before that threshold you wonât get a tax break for charitable giving anyway. Â
One significant benefit of giving at checkout is that the nonprofit doesnât get your name or address, so you never go on a mailing list. If you give an average of 30 cents twice a week when you buy a soda at the gas station, over the course of a year youâll have given over $30 commitment-free. Sweet deal.Â
Hereâs what most people think is the catch: between three and seven percent of the money given goes to that processing company I mentioned. Because they have to, you know, process that money, which comes with expenses like software, customer support, servers, bank fees, etc.Â
However. Three to seven percent? Thatâs nothing. A good fundraiser working for a nonprofit costs, in salary, roughly 20% of what they raise. For every dollar they earn, they bring in about $5 from donors. Round-up campaigns raise $5 and charge you 25 cents for it and require almost no work from the charity â that money just shows up. And even if you didnât give at the checkout, if you give online we pay a processing fee to the place processing THAT payment. If you give by check or cash, we still have to pay people to count, record, and deposit those payments. Giving money costs money. Thatâs just the way it is. Â
2. Unless you actually are giving elsewhere, if you choose not to round-up, then youâre justâŚchest pounding. Youâre pretending to stick it to the man when really youâre just not making a charitable gift at all. If you do give elsewhere thatâs great, keep up the good work, Iâm not talking to you. And if you canât afford to give, Iâm really sorry, I want you to keep your money and Iâm also not talking to you. As we know, thirty cents adds up. I couldnât give for several years, and itâs a point of pride now to always be able to hit the round-up button without doing any math.Â
But if you could give and arenât giving somewhereâŚthen no offense but you have no skin in this game and you need to sit down and let people who give a shit get on with their work.Â
Because an additional truth is that some people only remember to give when theyâre asked but they HATE TO BE ASKED, except at checkout. And some people only give if they feel like theyâre giving insignificantly relative to their income â like thirty cents at checkout. These campaigns are nearly-free, super-easy money for us from people who probably wouldnât otherwise give. They raise our profile, too, so that people who have given at checkout think of us when they DO remember to give (like oh, around the holidays, which are fast impending).Â
In the end, I suppose Iâm really just begging people, as a whole, for about the seventh or eighth year running, to stop coming to charitable giving from the standpoint of âWell whaddaya give me for it? Whereâs the catch? How do I know youâll do the best with my money? Can you prove you arenât a scam?â
I know that most of you, most of the time, come to any relationship with an inherent assumption of good faith â from tv shows to friendships to Etsy purchases to pet ownership. Youâre not deeply suspicious by nature! But this lingering hostility towards charitable giving, where the immediate assumption is one of bad faith, is really harmful to people who are attempting to do good work. An extremely small fraction of the nonprofits that want your funding are scams, religiously sketchy, or deeply negligent when it comes to how your money is eventually spent. Most are doing their best and many are putting up with a lot of unnecessary fucking side-eye while they do it.
So try to downshift from âWho will scam me the leastâ to âWho would I like to help the most?â and give accordingly. Whether thatâs a local pet shelter, a toy or blanket drive, a national cancer organization, your friendâs top surgery gofundme, or the woman standing in traffic with the cardboard sign. Your blood pressure (and mine too, for that matter) will go way down.
Also regardless of whether you choose to round up at checkout or not, getting a majority of people to round up for charity is almost definitely a requirement for the sales assistant. When I worked retail seasonal charity roundups were part of our KPIs, and we got chewed out if we didnât get enough. So you can choose not to round up, but please donât be a jerk about it. The person at the checkout isnât trying to scam you, but theyâre definitely required to ask. You can just say âno thank youâ and move on.
TWO VERY GOOD THINGS TO KNOW
