Why Do Grocery Stores Ask for Donations?

You stand in front of the cashier who is bagging your groceries. The cashier with a smile asks you to donate to charity. Now, you are in a dilemma. Politely saying no might appear insensitive to the queue of people behind you. 

Do you simply drop a dollar into the donation box or kindly mutter some words before you head for the door? 

But wait. Why is the grocery store asking for donations?

Charities & nonprofits love to raise money, and grocery stores have become a front to ask for donations. The thought of people donating to sketchy foundations is a cause for concern for many.

Are all the monies tax deductible? How can you track where the monies are going to? 

In this article, we’ll discuss all you have to know about why checkout charity is a deal and grocery stores the poster boys

Why Grocery Stores ask for Donations

Checkout charity, as some people call it, is the most cost-effective way of raising money for nonprofits. Cause Marketing Forum, a company that partners with fundraising organizations, analyzed 63 checkouts and reported them over $358.4 million. 

So it’s a lucrative business with little to no advertising costs. Businesses will use different ways to seek donations at the checkout by directly asking shoppers to donate or purchasing paper pink ribbons to be hanged in the store. 

This idea is clever. Lenkowsky, professor at Indiana University, said “people are likely to give when their wallets are open. It’s so effective and cheap that’s why stores will continue using those tactics to raise funding”.

It’s quite impressive that people are generous and willing to give strangers money. If anything, it shows that we live in a modest and empathic society.

However, some of the charities you donate to might be taking cuts out of the money and only a small percentage goes to the people in need. So how do you ensure that the monies you give are reputable nonprofits that have a good track record? 

Are Grocery Store Donations Tax Deductible? 

If you get any incentive in return for a donation, then it’s not tax-deductible. Deductible tax needs to be acknowledged by the 501(c)3 Charity. In this case, you will need to get proof of donation, which the IRS will scrutinize. 

If you don’t often spend large amounts on donations, then claiming store donations will not stand. The Tax Cuts and Jobs Act has made this even difficult by raising the list of itemized deductions. 

How to track 501(c)3 Charity Donations 

You can use a free tool developed by the IRS to do a quick search. Simply insert the name of the charity and check if they are recognized by the 501©3 charity. 

Do Grocery stores get tax deductions from Donations? 

If they have matched donations with receipts as proof, then they can claim deductible taxes according to the PATH ACT established in 2015. However, if the donations are anonymous, they can’t claim the right to deductions. 

How to Ensure Donations get to Charities                            

Charity watchdog experts advise shoppers to only donate to charities with a good track record of disbursing funds to people in need.  

The American Red Cross and March of Dimes are good examples of organizations with clean track records. But do your research on the companies that put up these charities.

While charity watchdogs don’t oppose the use of checkouts to collect donations, they advise a direct donation. This will ensure that the money follows the right channel and tax gets deducted in the process. 

How to respond to a donation request 

You have two options; oblige and drop a dollar into the donation box or simply say “No”. It doesn’t mean you are not a good person. It makes you upright, rather than look like someone that would whine about how uncomfortable it feels donating to an unknown charity.

There’s no shame in politely rejecting an offer, no matter how noble it might seem if your energy doesn’t vibe with it. 

You can always ask the cashier for the name of the charity. This will help you make extensive inquiries. If they are a legal company and have a good track record, you can look for ways to donate directly.

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