Bucks: Donations at the Checkout Counter Are Often Deductible

If you find yourself inside a big chain drug store once or twice a week, you’ve probably been asked whether you want to donate $1 or so to a particular cause at the checkout counter.

All sorts of retailers periodically run these types of campaigns. But as a money writer, I’ve often wondered if this is the most efficient use of your charitable dollars, or is it yet another way to guilt you into parting with more money when other people are watching you.

As it turns out, the few companies I spoke with pass along 100 percent of the donation to the cause, and it’s considered tax-deductible.

Retailers all have their own reasons and motivations for supporting a particular cause and run their campaigns in different ways. But CVS and Walgreens, which owns the Duane Reade drug stores in metropolitan New York, said that they pick up the administrative costs of the campaign and send every dollar donated to the charity. The companies said they don’t typically match consumers’ contributions, as some employers do, though the campaign may be part of a broader philanthropic effort.

But some retailers do provide a match. “They are typically matching up to a certain point, or anything above” a certain level, said Daniel Butler, vice president for retail operations at the National Retail Federation.

If you want to donate more, that’s usually an option (though you run the risk of befuddling the checkout clerk). The amount you give will be listed on your receipt, which you should hold onto for tax purposes.

To qualify as a deduction, charitable donations must be made to “qualified organizations.” And only people who itemize their deductions on their federal tax return can deduct their contributions.

“A lot of the stores that collect for charities do show the donation and the cause on the receipt that you receive when you check out at the store,” said Mark Luscombe, principal analyst at CCH, a tax and accounting information service. “You would need a receipt for the contribution to get the tax deduction, unless you pay by check to the charity, which most people do not do” in that situation.

Whether the retailer has chosen a charitable organization that is well-run is another matter. There are several Web sites that can help you begin to sort this out, including CharityNavigator.org, GiveWell.org and GuideStar.org.

What do you think of the retailer’s efforts? Do you think it’s a good way to donate to charitable causes?

Article source: http://feeds.nytimes.com/click.phdo?i=d3d6c3e39674717e7539ce598bf836b2