"and will you add $# for homeless pets?"
October 19, 2015 8:37 AM   Subscribe

Every time I buy something at Petsmart, the cashier finishes by asking "and do you want to add $1 for homeless pets?" If paying by debit, the last screen offers you options for what amount to donate. Of course I would like to support homeless pets - via my local nonprofit, whenever possible - but is this a good way to do it?

Last time I checked out, I asked if they had a brochure on the homeless-pet program. The manager came over and explained to me that an electronic contribution goes to the national corporate office for national programs, and cash donations (he pointed out a cash/coin drop) go to the local store for local programs. This was not all that reassuring - seems like a golden opportunity for non-malicious misuse. I could check a watchdog site like Charity Navigator, but there is not even a name for the program. They must be raking it in, if almost every customer says "sure." I assume Petco has something similar. Any inside information on this?
posted by mmiddle to Pets & Animals (10 answers total) 2 users marked this as a favorite
 
Petsmart Charities (and Petsmart Charities of Canada). On Charity Navigator.

Petco Foundation. On Charity Navigator.

As far as I can tell, this is where those donations are routed, along with larger donations and corporate donations and that kind of thing.
posted by Lyn Never at 8:43 AM on October 19, 2015


That's not to say the manager isn't running off with the cash jar, but from my familiarity with Point of Sale and ERP systems, those dollars that get added via debit/credit can't really go anywhere but where the software says for them to go. They have great ratings (and there is a financial incentive for a for-profit business to walk arm-in-arm with a 503(c)) so it sounds like they are managing their charities about as ethically as you could hope for from a financial perspective.

I don't know if local stores are terribly involved in the decision-making process that distributes funds, but given the strong association between both chains and local adoption groups I would suspect that at least some of those donations do come back home to your community, plus the soft donations like store space and supplies for in-store adoptions.

I have heard anecdotally that both groups are pretty agile about crisis situations, particularly food donations for shelters in trouble or natural disaster emergencies, since the food is already there in the stores and regional distribution centers.

It's certainly not the worst dollar you could donate. Given that some percentage of every town's "rescue groups" are enabled animal hoarders, it might be a smarter dollar than a random donation locally.
posted by Lyn Never at 8:57 AM on October 19, 2015 [3 favorites]


Businesses do this because they get the tax break/write off without having to donate their own money, but get to look generous. Petsmart & MaDonalds are different to many business that do this as they have their own charities that the money is being funneled into & they both have very good ratings. Though both do like to use the charities as publicity as well, so make of it what you will. If you want to help your local groups, I'd suggest donating the money directly that way you can be sure "expenses" how ever low they may be set or reputable the groups collecting might be aren't being taken out first.
posted by wwax at 9:10 AM on October 19, 2015 [2 favorites]


Response by poster: Thanks! I will say yes more cheerfully now.
posted by mmiddle at 9:41 AM on October 19, 2015


Petsmart has my information for a loyalty card, so after the end of the year, I get an email notifying me how much I've donated, for my tax-deductible gifts to charity.
posted by SillyShepherd at 9:53 AM on October 19, 2015


The "tax writeoff" is a chimera here. They get to deduct exactly how much they give out from their bottom line. But that bottom line is increased by the donations they accept from customers. In other words, the dollar you donate is exactly offset by a dollar going out for a charitable purpose, and there is no net effect on their taxes.

If they use some of their profits for charitable purposes, including matching customer donations, then those dollars do reduce the amount of taxes they pay. But they could do that with or without your donations.
posted by kindall at 11:44 AM on October 19, 2015


The Petsmart here actually has dedicated space in the store for the local Humane Society to do adoptions. There's a cat room with cages full of cats and a dog room with big and small kennels (and dogs), and a big room where people can meet and interact with dogs they're thinking of adopting, all apparently specifically built. And then they still do adoption days for other organizations just out in the store, usually on weekends. So while looking at the numbers and ratings helps me feel better about it, seeing this when I go there leaves me thinking they really do some fairly major stuff. I don't know what the terms of the partnership actually are, but adopting a dog or cat means you're more likely to keep coming back for toys and beds and litter, too, so it's a win for them all around.
posted by dilettante at 5:18 PM on October 19, 2015


They get to deduct exactly how much they give out from their bottom line. But that bottom line is increased by the donations they accept from customers. In other words, the dollar you donate is exactly offset by a dollar going out for a charitable purpose, and there is no net effect on their taxes.

I wonder, really? They don't get to write off any administrative costs (and they must exist) involved in the collection of and accounting for the donations, the preparation of the collecting materials, the research and selection of donation targets, etc? Because, in a nonprofit, we would definitely note those as indirect expenses and not taxable. I don't know corporate law anywhere near as well, though.
posted by Miko at 7:49 PM on October 19, 2015


Sure they could deduct administrative costs. But that is also money they spent. Writing off the costs of a charitable program reduces the amount of tax you pay, but the costs of the program will always be higher than the savings from the deduction. Say your tax rate is 10%. You spend $1 on administration of a charitable program. You write it off. Having $1 less income means you don't pay tax on that dollar, which means you save 10 cents. But you still spent the dollar, which means you're still down 90 cents.
posted by kindall at 1:34 PM on October 23, 2015


In theory, that's how it works. But in reality, if you need to show a business loss in one area for tax reasons, you could in fact say "but our administrative costs for the charitable program have risen, so we had to shift funds over to that." In other words, I think there is plenty of room for shenanigans in this system. Also, I'm not sure about your math there, because it's donated income: you're not "down" 90 cents from budget, because you never would have made that in earned revenue anyway - that was purely donative income, and was never taxable and never coming to you through a fee-for-goods transaction - so you're actually up 10 cents, taking a cut via tax deduction after paying administrative costs and passing through whatever is left to donate. If that's helping support an expansion of space, office services, staff, etc., it's likely helping the company grow even as dollars leave through donation programs.

Anyway, my question was really looking for actual specific and concrete financial information about programs like these, because, at least from a nonprofit finance perspective, it's clear there are financial advantages to the corporations. I am just curious as to how extensive they are.
posted by Miko at 2:24 PM on October 23, 2015


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