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Wednesday, January 15, 2020

Should You Feel Good About Donating at Checkout?

Here's a common scenario: you just spent the past hour adding items to your shopping cart at your local supermarket.  You get to the register, place all of your items onto the counter, and proceed to be rung up.  Now you're asked to consider making a donation to a charity.  A myriad of questions float through your head before you ultimately decide whether or not to press yes or no.  This form of donating is called point-of-sale donations.

Point-of-sale donations can be a tricky concept to grasp. On the one hand, they offer the public a simple way to donate, they help both the corporate retailer and the nonprofit meet their goals, and they’re relatively straightforward for retailers to try and implement. But how can someone know for sure where their money is going? How does a customer know which donations are legit and which are not? Are these donations even effective?

First, let’s talk about the positives of point-of-sale donations. According to a piece by Checkout Charity, donating at checkout raised more than $390 million dollars in 2014. Of the people surveyed, 55% reported that they enjoyed being asked to donate, 66% donated less than $2 per transaction, and 65% of consumers who donated remembered the last retailer that asked them to support a charity. Engage for Good reports that in 2016, the nation’s top 73 point-of-sale charity fundraising campaigns collected more than $441 million in the U.S. alone. Children’s health organizations such as the St. Jude’s Children’s Research Hospital and Children’s Miracle Network Hospitals received more than $70 million in charitable contributions from donations at checkout in the same year. 

Companies engage in point-of-sale donation initiatives for numerous reasons, the biggest one being that donations are easy to implement into a checkout system. Partnering with a nonprofit offers a company the chance to show its consumers that it is committed to giving back and doing good. These partnered campaigns also allow companies to bring out their own creativity and showcase their personality. For example, an ice cream shop might give out a paper ice cream cone to every donor, have them write a unique message, and place it on their wall to show its customers’ support.

In a 2018 study by America’s Charity Checkout, 96% of respondents felt neutral or more positive about a retailer after donating at checkout. And, 55% of those respondents said they would shop at the retailer again because they were empowered to donate to a good cause. The study also noted that 69% of respondents made POS donations in the last 12 months and that the top reasons respondents said they give were as follows:

  • Makes me feel good
  • Passionate about the charity 
  • Recognize the charity

One of the downsides of POS donations is how the organization that’s accepting donations represents how they are collecting donations and providing them to the charity that is benefitting. In a 2015 survey, Survey Public Inc. found that two-thirds of respondents said they were uncertain about how the money they were donating was being allocated, how much of it went to administration, how much of it was going to the people it was intended for, and if the retailer itself was making any contribution to the charity. Small Business found that 60% of consumers wish organizations would make it easier to see its values and positions on important issues at the checkout. Of the 28% of respondents who said they don’t donate to charity, 44% said that it’s because they don’t know anything about the cause they’re being asked to support. 

It is clear that, while point-of-sale donations are fairly popular, easy to implement, and actually increase a customer’s opinion of their local business, companies sponsoring them need to be clear and transparent with how contributions will be collected and donated. If customers don’t know who they’re donating to or what that the organization’s mission is, they’ll be less inclined to donate. As simple as the implementation is, the justification and definition of an organization and their goals is just as important. 

Tips before making a POS donation:

  • Unsure about where your money is going? 
    • Ask! Stores should have that information available to them and should be able to answer if you ask how it is being distributed or where it is going.
    • If you’re not in a rush (and there’s no one waiting in line), quickly research the organization on your phone by searching for them on Charity Navigator. You’ll be able to see their star rating at a glance and feel good about supporting an organization who has good financial health and governance practices.
  • Convenience < Effectiveness 
    • Point-of-sale donations are excellent opportunities to make small donations to organizations that pique your interest. If you plan to donate a larger gift to an organization, be sure to do due diligence beforehand and consider supporting the charity directly.

Remember, small donations add up to big ones. The next time you’re asked to give at checkout and it’s a cause close to your heart, consider making a small donation. You’ll likely feel good about it and help someone (or something) in need.

Written and contributed by Matthew Elmore, a Content Writer for DipJarDipJar is changing the game of fundraising by providing connected devices with an integrated payments platform to enable cashless generosity for engaging, joyful & frictionless donations. The DipJar platform is helping thousands of customers empower new donors and capture more donations.


Gale said...

As someone who once worked in ajob processing gifts at a university, I would like to point out one more benefit to "point of sale" donation (as well as cash donations put into a bucket or box to be donated).

It costs the receiver less to process that.

For every person who mailed in a check or even cash, we had to record that gift and mail the giver receipt of their gift for tax purposes. Usually we would check and update their info as well, unless specifically asked to not keep information on the giver (though actually not being able to keep info on the giver could make our job more difficult in other ways). All that takes time, which costs money in terms of how many people have to be hired to do that job.

When people throw money into a box, or do a point of sale gift, generally that is ONE large gift we need to process in stead of many (and when a large corporation does a giving campaign, that can be the difference between one gift and MILLIONS to process, if all those people had donated individually, which is less likely anyways). And, since these "point of sale" gifts are usually small amounts ($1-5), its a way for people to give that without most of their gift getting eaten up in the cost of processing it.

THAT really does save money. If you are giving a small amount I would say it would be more cost efficient to "put it in a donation can" through a trusted source than to send that money in an envelope directly to the charity.

For larger gifts, sending it in a way that it can be tracked is still wise.

Unknown said...

I don't donate at the checkout because the store will get a huge tax write off. I would prefer to make my own donations so that I can claim my own tax deductions.

Unknown said...

Don't you want the business who makes giving available to get a benefit? If it is a business you support ... or that supports you by being in business, why not give?


Ron Waltman said...

My two issues, and the reason why I prefer to make automatic on-line monthly donations are 1) How do I know what percentage, if any, of the donation is kept by the retailer as a 'service fee' 2) If I were to donate $5 per week at a specific retailer for a specific charity do I receive some sort of donation form to document my $260 annual donation? What if I'm audited, how to I proved I did donate $260 to the organization?

MM said...

Regarding the tax write-off, when I make a donation, it shows up as a line item on my receipt, and I claim that as a write-off.

Dan in FL said...

When I donate at the counter, and later I see the Grocery store President or a Public Relations Dept. ad say " ABC Grocery donated $800,000. toward relief of ..." I think who donated? the company or the companies clients. This is a huge PR campaign that cost the company very little but gives the company a huge Public Relations and maybe tax benefit. I think Companies need to say it was OUR customers, not us, or we matched the amount or something. It was not the company.

Unknown said...

I don’t believe that is true. The donation income would go on the books as a payable to the charity and when payments to the charity are made it would serve to reduce the payable. At no point would they be able to take a tax write off unless they are matching donations and then only for the matched amount. Additionally, if you save your receipts, you yourself could take the tax deduction for the donation. I hope this clarifies the issue.

Unknown said...

I don’t donate at the checkout because (1) I resent the judgment and pressure ("are you a generous person or a miser?"), (2) I don’t know how much of my donation will get to the charity (vs kept by the retailer as a "fund-raising cost"), and (3) I don’t know if my private information is going to be sold by the retailer or charity so that I’m later deluged with charity solicitations.

Joaniekins 2 said...

I only participate in checkout donating at my local Publix, where they collect funds to
feed the hungry at Thanksgiving and Christmas. I wonder why....hunger prevails in April
and July, too, so they limit their collecting just like people go to church at Easter and
Christmas. Regardless, I give frequently and generously, knowing that Publix is a trust-worthy organization, very much involved in their communities

Unknown said...

Most taxpayers do not get a tax credit for charitable donations anymore now that the universal credit on their 1040 is $12,000. So, for most of us, the POS donation is more effective all around.

Unknown said...

A lot of questions were left unanswered in this article:

1. "96% of respondents felt neutral or more positive about a retailer after donating at checkout"
Why did the author lump "neutral" with "more positive?" Probably because the vast majority were neutral. I don't know about you, but I certainly don't think better of a store because they asked me to donate to a specific cause.
2. The author never says how much the retailer takes for administrative costs. This information should be available.
3. The author never says if the retailer makes a donation; I believe it should.

BL Worrilow said...

I only donate to one and it is the charity (four star rated) for the charitable part of the business. Otherwise, no. But the receipt showing that donation, which is not taxed, you keep to record as your own charitable donation.

Unknown said...

I give a lot to local charities and civic organizations but I dislike being asked to donate at store checkouts. The most frequent beneficiaries there are the richest charities in the country who also advertise on TV. I often wonder if the cashiers are given a target amount since some do not like to take NO for an answer.

Penny said...

The ARC thrift stores in my area ask if shoppers want to round up their purchases to an even dollar amount and this is a very effective way of contributing to their mission in a practically painless way.
The big grocery stores ask for donations for various worthy charities, all of whom I've heard of. I don't contribute at the checkout as I'm pretty well maxed out budget-wise with my usual donations, though Gale's comment (above) about the cost of processing small donations gives me cause to rethink my future donation strategy.

Com Gen said...

I donate thousands of dollars to my charities each year. I screen and select them through Charity Navigator. I totally resent being asked at the register if I wish to donate to a charity especially because I almost always say no. It puts the consumer on the spot because people are usually standing in line behind you and judging you. If I say no, then I'm sure many people think poorly of me....yet I gave nearly $9K to charity this year. Some of the charities they collect for I used to contribute to. I stopped when they hounded me on a weekly basis for more and more money. I wrote to tell them to stop - St.Jude's for example - and they ignored my request to stop receiving multiple mailings. As a result I no longer contribute to them or any other charity that begins to harass me with requests. I essentially equate the checkout counter in the same way....I'm asked every time I shop. I don't like it and I question whether the stores are donating the money and receiving the tax deduction for our $$. I think they should stop asking - permanently.

Unknown said...

I have researched PetSmart charities on Charity Navigator and other places and I love to support them at the checkout register. As a matter of fact, this is the primary reason I shop there. 100% of my donation goes to the charity and my nonprofit feral/stray, spay/neuter group that I work with has been the beneficiary of PetSmart grants that directly or indirectly have helped us tremendously.

amsteinmetz said...

I have a rule for myself that I no longer give to any charities that send me a request every month or junk that I don't want. St. Judes once sent me an old fashioned key (as in ket to their heart). Totally useless. I now use Quicken to see who and when I donated to last year, and if I still like them I try to send my donation earlier. I throw away any requests that have presents in them - they are clearly wasting the money people are giving them. the only thing I keep are the tablets of paper and only because I actually use them and it seems better than throwing them away. I don't donate at the checkout counter because I do use Charity Navigator and I give away a fair amount of money. I also have a letter that I wrote telling a charity why I am no longer sending them money which I keep on my computer and I adapt it to whoever is bugging me.

Unknown said...

I agree that asking for POS donations is intrusive. It also makes it seem that shoppers wouldn't donate if it weren't for the "generous" supermarket chain. I always say, "No, thanks. I choose my own charities."

Unknown said...

We live in a city that has a very reputable food bank. Our grocery stores collect and use the money to help support food donations. It is an easy way to help the food bank (I also send separate checks myself). I think it also helps remind shoppers that there are people right in our own community that need help and gives them a small, gentle nugde to keep these people in mind.

DSC said...

Every time I am asked to donate (small store, big store, anywhere in the USA), I ask how much, if any, is the corporation itself donating to the charity. Clerks NEVER, EVER have any idea. I then politely tell the clerk that since their employer is asking customers to donate, they should be able to tell customers how much their corporation is donating. Several clerks have become very defensive about it, one telling me, "OK, I won't ask you to donate next time." (As if there will be a next time I am in that store unless I absolutely must be for some reason.)

bring-our-troops-home said...

I hate when they ask me to donate at the checkout. I don't trust that the money actually goes to the charity.
As for constant mailings after a donation, that drives me crazy. St. Jude and Smile Train are the worst! I feel like the money I donated has already been wasted by sending me constant pleas for more money.

TimKane said...

As long as the charity and the retailer are reputable, I have no problem donating. Publix in Florida is an exceptionally well-run grocery chain. When their cashier asks me if I'd like to contribute to a worthy cause, I do. Why? Because I trust Publix and a dollar or two isn't going to break the bank. It's about Trust. When a Charity or a Retailer earns my trust I feel very comfortable donating.

TimKane said...

When the cashier at Publix asks if I would like to contribute, I almost always do. Publix is one of those few retailers that prides itself on customer service. When asked to contribute I'm very certain the charity has been vetted and my contribution will be directed properly.

Unknown said...

That's not true tho. You get the write off, not the store. You just need to keep your receipts for tax time.

Unknown said...

I'm not sure for the donation boxes, but for the ones you do at the register (like where they ask if youd like to do a donation today at the grocery store) the donation should be on your receipt and you can use those for taxes.