Charity Checkout, Who's Tracking Round-up Donations - FOX10 News | WALA

Charity Checkout, Who's Tracking Round-up Donations

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(WALA) -

Chances are it's happened to you.  You're at the checkout when the cashier asks, "Would you like to make a donation today?"

All you really want is a sandwich or to get some groceries.  But the store you're shopping at is helping charities cash in as you cash out.

"I do feel like it's almost unusual to go in and out of the store without being asked.  Quite frankly it feels a little bit much to me," explained Mobile shopper, Steve Edwards.

While it might make some people feel uncomfortable, the practice isn't going away.  Why?  Because the tactic works more than 71% of the time according to the Better Business Bureau.

"Because it's quick.  Because it's easy. Because it's convenient for the charities...and it's sort of the latest new fad in fundraising," said Tyloria Crenshaw, Branch Manager, BBB Central & South Alabama said.

According to last year’s America's Charity Checkout Champions report, more than $441 million was raised in the U.S. by a group of 73 point-of-sale fundraising campaigns in 2016.  Companies love it because it makes them look good.  Charities like it because it's a way to fill the gap.

eBay wins with more than $56 million raised for more than 34,000 charities of the sellers’ choice including the American Red Cross and Save the Children.

Walmart and Sam’s Club are listed as second with a collection of $37 million for Children's Miracle Network Hospitals.

Petco rounds out the top three with close to $30 million for its foundation, which funds animal welfare and adoption organizations.

But what about transparency?  The BBB points to the many questions surrounding checkout charity campaigns, including:

  • What role does the store play in supporting the charity besides your donation? 
  • Does the store receive a match for any of the donations? 
  • Does the store get a tax write off? 
  • Does the store charge the charity administrative fees? 
  • What percentage is donated directly to the charity? 

Truth is...many of those questions don't have answers because there's very little regulation of checkout charity donations.  

Good Scout, a group that's been tracking the consumer preference for charity, says what *should be disclosed at the point-of-sale though, is where the money is going.

"At the point of solicitation, there should be some material there to tell you about the length of the campaign, how much of your money is going to that nonprofit.  Most of the time with charity check out campaigns in retail it's 100%," described Charisse Brown, Representative, Good Scout

However, what's not 100% clear is who keeps track.  The BBB says its Wise Giving Alliance only tracks how the money is spent after it reaches the charity.  

In larger companies, the annual audit would be the only checkpoint for the calculation of checkout charity funds.  Those audits are generally open to public inspection for non-profits through the IRS's 990 form search.  Another avenue for maintaining the integrity of those funds would be good internal oversight from a board of directors within the company— which is what Jim Chandler, Franchisee of Firehouse Subs says the company has.

"I can't speak for other companies but, as far as Firehouse Subs is concerned, I am very happy with how the system works.  The fact that it's a system that is directly deposited into the foundation...I know where the money goes," Chandler said.

"There's a board of directors that makes the decisions on who gets the money and it goes to a great purpose that helps to save lives." 

Not all stores take write-offs, most don't charge the charity a collection fee, and in general, 100% of the money collected is donated.  On the other hand, the stores don't seem to match the donations of their customers.  

Shoppers we spoke to...don't mind.

"The fact that they’re actually willing to go out and help the community…it's a great thing for them to do," said Mobile shopper, Elizabeth Baker. 

"I have no major concerns about whether it's legitimate because if it's in a major store it is legitimate or else it wouldn’t be there," added Edwards.

Bottom line: when it comes to checkout charities, you shouldn't run screaming but the BBB says definitely do your homework.  

  • Get the charity's name. With so many charities in existence, mistaken identity is a common problem. Thousands of charities have “cancer” in their name, for example, but no connection with one another.
  • Resist pressure to give on the spot, whether from a telemarketer or door-to-door solicitor.
  • Be wary of heart-wrenching appeals. What matters is what the charity is doing to help.
  • Press for specifics. If the charity says it’s helping the homeless, for example, ask how and where it’s working.
  • Check websites for basics. A charity’s mission, program and finances should be available on its site.  If not, check for a report at www.give.org.
  • Check with state charity officials.  In many states, charities are required to register, usually with the office of the attorney general, before soliciting. 
  • Don’t assume that every soliciting organization is tax exempt as a charity. You can readily check an organization’s tax status at: https://www.irs.gov/charities-non-profits/exempt-organizations-select-check

"Consumers have to be careful about high-pressure tactics…that you need to donate right now," warned Crenshaw.  "You know, if you don't donate poor Fido is going to be outside in the cold...they prey on your emotions and heartstrings...but consumers should be savvy and take their time to do their research and do their homework.  And if you're not sure, it's okay to say no."

Her advice:  You're better off donating to the charity directly.

"We watch as much as we can in terms of the business and the charity but there are always those areas that are under the radar, and this is new territory that is being charted as we go along.  So I would like to see some guidelines in place or eventually for there to be a system to monitor that...I think it would be a benefit to the system and to the community."

Some people think you can't get a tax write off for checkout charity donations.  That's not true.  You just need the donation listed on your receipt along with the name of the qualified charity.

If you'd like to know where your money is going once you've made your donation, the IRS has a new tool that makes it easier for taxpayers to get information about exempt organizations.

"This new tool provides taxpayers an easy way to get information about charitable organizations," said Acting IRS Commissioner David Kautter.  “Tax-exempt organizations play a critical role in our nation, and this will provide greater insight for people considering donations."

The new Tax Exempt Organization Search (TEOS) replaces EO Select Check, a more limited tool available since 2012 that focused primarily on providing information on an organization’s tax-exempt status.

The new tool makes images of newly-filed 990 forms available for the first time. TEOS also features two major enhancements:

  • Users can access more types of information than were previously available using EO Select Check.
  • The search process has been simplified and allows users to look across multiple data files for information in one search.
  • In addition, TEOS is mobile friendly, which provides access to the search tool using smartphones or tablets. With the new tool, users can view images of an organization’s:
  • Forms 990, 990-EZ, 990-PF and 990-T (501(c)(3) organizations only) filed with the IRS. Initially, only 990 series forms filed in January and February 2018 will be available. New filings will be added monthly.
  • Favorable determination letters issued by the IRS when an organization applied for and met the requirements for tax-exempt status. Initially, a limited number of determination letters will be available. Eventually, determination letters issued since January 2014 will also appear on the system.

TEOS also can be used to find all the information previously available on EO Select Check. This information includes whether an organization is eligible to receive tax-deductible contributions, has had its tax-exempt status revoked because it failed to file required forms or notices for three consecutive years and, for a small organization, whether it filed a Form 990-N (e-Postcard) annual electronic notice with the IRS.

Publicly-available data from electronically-filed 990 forms will continue to be available in a machine-readable format through Amazon Web Services. Visit IRS.gov for more information   

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