It can be hard to do good. From each client payment, I set aside a specific percentage of the check and put it in a savings account. I’ve found this far easier than coming up with a lump sum at the end of the year. I can fund things throughout the year, rather than in a blitz in December. And, I know exactly how much I have to give—whatever the account balance is.
However, like all of us, I get multiple appeals from GoFundMe, Facebook friends, etc. I also just had a rather odd experience with a donation on Giving Tuesday (note to self: always write thank you notes when someone does something for you). I started to wonder about how this all works, and whether it was the best way to donate the maximum amount. Here’s what I found.
Donate your bag credit at Whole Foods?
Unless someone convinces me differently, I think this is a scam. Apparently, Whole Foods takes this as THEIR charitable deduction, not yours, so you’re actually funding a giant tax deduction for them. Also, you have no receipt. Keep your bag credit, put it in a jar, and give it to an actual charity at the end of the year. For me, 8 bags a week ($0.80) x (say) 48 weeks would be a $38.40 donation.
This turns out to be an actual donation to Petsmart Charities and you should save your receipts showing this if you do so. However, according to my research the deduction will be reduced by whatever the merchant credit card fees are, if you use a card.
Not only is this not deductible, since it’s considered a personal gift not a charitable donation, but the recipient is charged 5% by GoFundMe as well as 2.9% by payment processors. This is an outright waste in my mind, and I recommend never donating in this way. Just send the person a check if you really do care.
These donations are deductible if the organization is a 501(c)3. However, FB charges the charity 5% to sign up. FB did match the amount if you donated on Giving Tuesday—but only up to $7 million, a pittance which was gone in minutes, as far as I can determine. For all my kind friends who have been induced by FB to post donation requests on their birthday—maybe think again? I suppose 95% of something is better than 0% of something but again, a direct contribution would be better.
Credit card, Paypal, or Square payment?
Once upon a time, some credit cards did not charge charities for donations put on cards. As far as I can determine, this is no longer the case, and charities are charged whatever the merchant fee is for the card. Pay through Paypal and they’ll be charged 2.2% + 30 cents per donation. Square rips them off at 2.75% if there’s an actual credit card to swipe through their reader. It’s an even more whopping 3.5% + 15 cents if the number is manually entered.
Sure, it’s easier to give a charity request a credit card, but for most charities, especially small or local ones, every cent really counts. Many people tell me they no longer have checks, but here’s the ideal place to use them if you have them—or learn to send one directly online from your bank if you don’t use this service.
For more information, check out this site: