Incentives to donate?

[mikekle]

I think I have mentioned this on here a few times, I give money and materials to 2 local animal shelters regularly, I also give to a local homeless shelter too. My job is a perfect fit for this as well, since I regularly have to box up and remove ALOT of food products from my district of gas station/ convenience store chains, I usually take up to about 5 full boxes per store each month!!! these items are items the company has decided to discontinue selling, many of these items are brand new, not even opened yet, the stores right them off, it usually turns out to be around $5000-12,000 worth of products per store.

The tell us to remove them from the stores property and dispose of it elsewhere, this is to keep people from dumpster diving at the store. When I first started, I couldnt believe how great this was, I had friends and family hitting me up for candy bars, gum, little packs of medicine sold at the store, all kinds of things, but the quantity was getting to be more than I could handle, my dining room looked like a store room in a grocery store for a long time! LOL So after a short time, I decided to start donating it, I spoke with the people who run the animal shelters and told them how much product I was going to be donating, and it has worked out great for them, now they use the items i give them for special events they have, to fill gift bags, halloween events, Christmas events, sometimes they find buyers who will pay cash, these are usually people who own vending machines or small family owned stores.

Sorry to ramble on there, but anyway, When I first started donating, the homeless shelter and animal shelters both asked me the amount I would like the receipt to be for all the goods…I told them I did not want a receipt and was not the reason I was donating, I was and continue to do it for the good it does, not to help with my taxes, it kind of bothers me that we have to have this incentive in order for people to give, even when I give money, I never ask for a receipt.When I first did this , the people working there looked at me funny, almost like I was joking, but now, they know me and know not to ask for an amount.

Im just curious what everyones opinion on this is, and if they think if they did away with this incentive, how many people would continue to donate…i think its pretty bad some people do this JUST for the tax benefits, but I never hear anyone saying anything bad about people who do this, to me, its like the person who will only call in to report criminal activity if they are paid for their tips ( my city has a crimestoppers thing where people get cash for clues involving crime locally).

Am I wrong for thinking this way, or expecting more people to give/ donate for the real reason, and not for financial gain?

 

[Neofight]

I have done the same ( not taken the deduction) on occasion, sometimes large amounts, sometimes small.

I’m sure in one sense it’s noble, but i like to keep focused on my actions and attitudes of others.

Because of the good of the end result, I don’t find any reason to judge the motives for people making charitable contributions.

 

[teeboy]

It seems strange that a company would give you thousands of dollars of things when they could simply donate the things to a tax exempt organization and receive the deduction themselves. A business can’t give away merchandise to anyone and still receive a tax benefit; it has to go to a qualified organization.

 

[teeboy]

Oh, by the way. If you are receiving merchandise from the company, it could be considered compensation to you, and probably would be considered compensation, which means you would be better off not accepting the merchandise.

 

[CatholicSheila]

I think it is wrong to assume that people are donating only because they get a tax deduction. It most cases, people are still out of pocket financially. I may get 32.5 cents back for every dollar I put donate: that still leaves me out of pocket 67.5 cents.

If an organisation I donate to qualifies as a deduction on my tax return then I’ll take it. If the organisation doesn’t, then I wear the full donation. How much I donate doesn’t really change either way - I split my giving fairly evenly between my charities regardless of this.

 

[teeboy]

Another incentive, is just to get rid of the stuff because one is moving or because it isn’t worth much.

 

[teeboy]

If a U.S. citizen takes the federal standard deduction, there is no tax incentive for him to donate.

 

[sallybutler]

It seems strange that a company would give you thousands of dollars of things when they could simply donate the things to a tax exempt organization and receive the deduction themselves. A business can’t give away merchandise to anyone and still receive a tax benefit; it has to go to a qualified organization.

If they have already taken the deductions for depreciation, the donatable value may be zero.

 

[wmw]

If a U.S. citizen takes the federal standard deduction, there is no tax incentive for him to donate.

Yes, I agree that there is an unfair incentive for the high income people to donate rather than middle to low income folks.

I do think the government has good reason to encourage giving, but it should be an equal percentage return for the widow’s pence as well as the billionaire’s old yacht.

I see no lack of charity in taking such incentives. I feel that individuals better direct their funds than governments do. Say you get a 10% return on your donations. It would be better to increase your giving to 110% and give to better selected causes than what the government would pick for the 10% you don’t collect.

 

[teeboy]

If they have already taken the deductions for depreciation, the donatable value may be zero.

True. But merchandise isn’t depreciable.

I was on a job interview once with an auto leasing company. And the financial person there explained that I would be overseeing the recording of lease income on a monthly basis. I asked about depreciable assets, she said there were none. Hmm… That makes me wonder.

 

[teeboy]

Yes, I agree that there is an unfair incentive for the high income people to donate rather than middle to low income folks.

I do think the government has good reason to encourage giving, but it should be an equal percentage return for the widow’s pence as well as the billionaire’s old yacht.

I see no lack of charity in taking such incentives. I feel that individuals better direct their funds than governments do. Say you get a 10% return on your donations. It would be better to increase your giving to 110% and give to better selected causes than what the government would pick for the 10% you don’t collect.

I’m not sure on that one. The standard deduction should have some amount imputed in it for donations to qualified organizations.

 

[mikekle]

Oh, by the way. If you are receiving merchandise from the company, it could be considered compensation to you, and probably would be considered compensation, which means you would be better off not accepting the merchandise.

Im not really receiving it, our instructions are to ‘dispose of it off company property’, now imo, Id rather see this perfectly good food go to someone who could use it rather go in a dumpster.

 

[wmw]

I’m not sure on that one. The standard deduction should have some amount imputed in it for donations to qualified organizations.

That would make exactly zero incentive for receiving automatically the amount included independent of a great or no charitable donation.

 

[TypesAndShadows]

In a “swings and roundabouts” way, I just thought I’d mention how Gift Aid works in the UK.

Instead of claiming a tax deduction for yourself, if you pay income tax and fill in a gift aid form when you donate to a registered chartity, the charity gets to claim back the tax you paid on the income you’ve donated to them.

In the words of HMRC “Basic rate tax is 20 per cent, so this means that if you give £10 using Gift Aid, it’s worth £12.50 to the charity.”
hmrc.gov.uk/individuals/giving/gift-aid.htm You can increase the amount you give at no extra cost to yourself, just as you could with the deduction model, but no money is actually sent your way.

I just think it’s interesting to compare the models.

There has been some reporting that British super-rich don’t tend to do philanthropy the same way American super-rich do, but I don’t know if there’s a comparison for the rest of us. Certainly, this difference has come up in suggestions that we move to an American model, but I don’t see that this would lead to more money going to fund things if (with the way the rich can game the system) much of the money from the super-rich is simply being lost from taxes and so unavailable for funding public services.

 

[markomalley]

I always get a receipt when I donate.

If I, for example, donate $1,000 to the Little Sisters of the Poor, that works out to be about $400 I am able to save from my tax bill. Because of the fact that I typically have to pay a little bit at tax filing time, if I didn’t have that $1,000 donation receipt to deduct, I would, between federal and state taxes, have to pay an extra $400. Therefore, I am able to donate more because I claim the donations on my tax. The receipt is not the reason I donate, but it does allow me to be more liberal than if it wasn’t available.

Looking at your situation (collecting expired product from stores and providing them to nonprofits), I would not feel good about collecting a tax receipt in those situations, as I was donating somebody else’s excess, not my own excess.

 

[teeboy]

True. But merchandise isn’t depreciable.

I was on a job interview once with an auto leasing company. And the financial person there explained that I would be overseeing the recording of lease income on a monthly basis. I asked about depreciable assets, she said there were none. Hmm… That makes me wonder.

Correction: I asked about depreciable assets, she said there were effectively none. Hmm… That makes me wonder.