Joe Patti

An interesting situation has arisen in connection with at check out donation solicitations. Credit to Isaac Butler who retweeted a link to a post about a man who brought suit against drugstore chain CVS claiming the check out solicitations were a reimbursement for a $10 million donation obligation CVS had made to the American Diabetes Association.  In November, CVS asked for the case to be dismissed based on their claim that their agreement was only to make up the difference between what customers donated and $10 million.

Emma van Inwegen who linked to both articles in a Twitter thread helpfully added a link to a third article by the Tax Policy Center that answers the question about who gets the tax benefit when you donate at checkout.

According to author Renu Zaretsky there are a lot of Tiktok videos out there that spread incorrect information about the transaction. She says her children have forbidden her to post a video on the site refuting the misinformation. (my emphasis)

To start, keep in mind that there are two ways charities can benefit from point-of-sale donations. The first is where the store donates a share of its sales. That type of donation is deductible by the business but not by its customers. The second way is where customers add something to their bill at the register with the extra amount going to charity. Customers can claim those amounts donated as deductions on their individual income tax return, though almost nobody ever does.

She goes on to explain that when you donate at check out, the business receiving the funds on behalf of a charity is only acting as the collection agent and does not get any tax benefit.

Zaretsky says the problem with giving at check out is that most people won’t get credit for that, or any other donation they make, because they don’t itemize deductions on their taxes.

Even with a receipt, more than nine out of 10 taxpayers won’t deduct this—or any other– charitable donation from their federal taxable income. That’s because they do not itemize their deductions.

When the Tax Cuts and Jobs Act effectively doubled the standard deduction, the number of households claiming itemized deductions fell from 46.2 million in 2017 to 16.7 million in 2018. Most of those still itemizing their deductions are higher-income households. Those making more than $3.3 million annually get more than one-third of the federal income tax benefits from charitable giving, and few of these households are likely to do much of their giving at the grocery checkout counter.

I saw a tweet by Maria Popova linking to a piece she wrote about the philosopher Seneca’s thoughts on gratitude and thought it might make an appropriate post for Thanksgiving. Seneca was a proponent of the idea that giving should be done for the sake of giving, not receiving anything in return.

There is not a man who, when he has benefited his neighbour, has not benefited himself, — I do not mean for the reason that he whom you have aided will desire to aid you, or that he whom you have defended will desire to protect you, or that an example of good conduct returns in a circle to benefit the doer, just as examples of bad conduct recoil upon their authors, and as men find no pity if they suffer wrongs which they themselves have demonstrated the possibility of committing; but that the reward for all the virtues lies in the virtues themselves. For they are not practised with a view to recompense; the wages of a good deed is to have done it. I am grateful, not in order that my neighbour, provoked by the earlier act of kindness, may be more ready to benefit me, but simply in order that I may perform a most pleasant and beautiful act; I feel grateful, not because it profits me, but because it pleases me.

I happened to click a little errantly and saw Popova’s most recent post quoting John Steinbeck who felt it was more virtuous to receive well than to give.

It is so easy to give, so exquisitely rewarding. Receiving, on the other hand, if it be well done, requires a fine balance of self-knowledge and kindness. It requires humility and tact and great understanding of relationships. In receiving you cannot appear, even to yourself, better or stronger or wiser than the giver, although you must be wiser to do it well.

It requires a self-esteem to receive — not self-love but just a pleasant acquaintance and liking for oneself.

In fact, Steinbeck apparently had felt a degree of disdain for wealthy philanthropists who gave large sums after engaging in extractive and exploitative practices, a situation to which we may have circled around to again by some measures.

Writes Steinbeck:

Perhaps the most overrated virtue in our list of shoddy virtues is that of giving. Giving builds up the ego of the giver, makes him superior and higher and larger than the receiver. Nearly always, giving is a selfish pleasure, and in many cases it is a downright destructive and evil thing. One has only to remember some of our wolfish financiers who spend two-thirds of their lives clawing fortunes out of the guts of society and the latter third pushing it back. It is not enough to suppose that their philanthropy is a kind of frightened restitution, or that their natures change when they have enough. Such a nature never has enough and natures do not change that readily. I think that the impulse is the same in both cases. For giving can bring the same sense of superiority as getting does, and philanthropy may be another kind of spiritual avarice.