2 Reasons to Rethink Charitable Giving at the Cash Register

Advertising Disclosure: When you buy something by clicking links on our site, we may earn a small commission, but it never affects the products or services we recommend.

Image Not Available

Around 70 percent of Americans have donated to a charity at checkout, and 55 percent report that they like being solicited that way and prefer to be asked at least once per month.

That’s according to Good Scout’s report “Change at the Checkout: The Evolution of Charitable Donations at the Register.” The social-good consultancy surveyed more than 3,000 people for the report.

Giving to a nonprofit organization on the fly has its drawbacks, though. In fact, there are other ways to give to charity that favor both your bottom line and the fortunes of responsible charities.

Here are two key drawbacks of donating at the register:

You might lose out on a tax deduction

Donations to charity can be deducted from your federal income taxes, potentially lowering your tax bill. The Internal Revenue Service has detailed parameters for such deductions, though.

The IRS must deem the charity a tax-exempt organization, for example. You can use the federal agency’s Exempt Organizations Select Check database to determine if a charity is eligible.

The IRS also requires certain documentation to make your contributions eligible for a tax deduction. As the agency’s tips for donating to charity state:

You must file Form 1040…

You must maintain a bank record, payroll deduction records or a written communication from the organization containing the name of the organization, the date of the contribution and amount of the contribution.

You might support a less fiscally responsible charity

When donating to a nonprofit at checkout, you forgo the chance to research it first — and not all charities are equal when it comes to how they spend money.

Take CEO compensation, for example. Charity Navigator examined more than 3,000 nonprofits for its latest annual CEO compensation study and found 12 that paid their chief executives at least $1 million. That’s up from nine the previous year. Your hard-earned money could be going to one of those organizations if you don’t do your homework.

Some organizations also devote more money to fundraising and less to their actual mission than watchdog groups like Charity Navigator advise. To learn more, start with “15 Ways To Ensure Your Donated Dollars Will Make A Difference.”

Like this story? Share it on Facebook!

Get smarter with your money!

Want the best money-news and tips to help you make more and spend less? Then sign up for the free Money Talks Newsletter to receive daily updates of personal finance news and advice, delivered straight to your inbox. Sign up for our free newsletter today.