this post was submitted on 17 Nov 2024
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[–] [email protected] 202 points 1 week ago (29 children)

Ah, this again.

The mega corporation did not receive any tax benefit from collecting donations. They are able to write off the amount of donations from their income, so that they aren't paying tax on the money they collected specifically to be donated.

  1. Company collects $1 donation from customer
  2. Company has $1 extra income
  3. Company donates $1 to charity
  4. Company writes that dollar off of their income.
  5. Company reports the exact same profit/loss as if they had not collected donations.
[–] [email protected] 53 points 1 week ago (12 children)

I assumed this was true also, but I also believe the company is receiving some sort of kick back from this otherwise they wouldn’t be doing it.

[–] [email protected] 1 points 1 week ago* (last edited 1 week ago)

The non-profit can hire the company executive and pay them, which if I understand correctly is exempt from income tax.

I think this can be a way for executives to avoid income tax: basically donate to a foundation through obscured means (crypto, purchase from third party, etc), then get non-profit money with exemption. They probably need to jump through many hoops and it is very likely still illegal, but I wouldn't be surprised if this is common.

But anyway the couple dime people are donating probably is neglegible for tax purposes (I am guessing, I don't have data). Yet I see no reason not to just donate to a charity you trust online...

Source about income tax: https://www.investopedia.com/ask/answers/08/nonprofit-tax.asp

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