Charity Contribution

[Ezra]

I've noticed an increasing number of retailers are "suggesting" a small charitable donation at point of sale (round the amount up, add £0.25, etc)....Costa was the latest I noticed this morning.

I simply find the backdoor guilt trip they're pushing quite annoying, and don't really believe any money gets to charity. Anyone have any direct experience as to why retailers are doing this (other than my cynical view that they're pocketing the extra cash) or, indeed, if any money does find its way to worthy causes?

[Simpo Two]

I'm sure the money does have to go to charity, and that they do it for the PR.

If a major corporate was caught pocketing charity money they'd be all over the news, and rightly so.

[Ezra]

Simpo Two said:

I'm sure the money does have to go to charity, and that they do it for the PR.

If a major corporate was caught pocketing charity money they'd be all over the news, and rightly so.

I'm interested if anyone has any direct experience though, as opposed to an assumption. It would be very easy to absorb all customer donations via an admin fee / misc cost, and just show a token charity donation in the R&A's.

[mmm-five]

It's simply so they can say 'Company X' has given £xxm to charity...when in fact it's partly come from Company X, their customers, and many other sources (including Gift Aid on these donations).

The split will vary of course...and there will be some who are more 'shady' than others...but the big names should be transparent about it.

Most will detail their charitable credentials on their website too, if you want to check how/where it's spent...e.g. Costa and Costa Foundation





Of course, if you're asking how can you prove that 100% of the 20p you put in a collection box actually goes to the charity (even if the charity then uses 50% of that for admin), then it might be more difficult than tracking electronic donations.

Edited by mmm-five on Thursday 20th April 11:20

[BoRED S2upid]

McDonald’s have their own charity do I imagine there’s goes to that. Seems pointless to me round up by 0.02 for charity.

[Simpo Two]

BoRED S2upid said:

McDonald’s have their own charity do I imagine there’s goes to that. Seems pointless to me round up by 0.02 for charity.

2p on every McDonalds transaction probably adds up to a useful amount!

[StevieBee]

Ezra said:

I'm interested if anyone has any direct experience though, as opposed to an assumption. It would be very easy to absorb all customer donations via an admin fee / misc cost, and just show a token charity donation in the R&A's.

Former employee of one of the 'Big 10' charities (Barnardo's) and current experience that puts me in amongst some of the charitable / public sector and corporate cross-overs.

I'll feed your cynicism first. For the companies, because the donation is made at the point of sale, it's recorded as a sale. This gives the impression that sales are slightly higher than they actually are. This reflects positively amongst shareholders and investors, (despite the adage that turnover is vanity, profit is sanity). This is also why a few years ago the supermarkets started to ask if you wanted cash-back on your shopping when you paid with a card. Adding £20 at the till and handing that back to you in cash showed that you spent £20 more than you did, even though the supermarket didn't keep it. So, there is sometimes a commercial motivation at play. However.....

CSR is not just a fluffy, nice-to-have. Bigger companies are obliged to demonstrate social responsibility as part of planning applications, government grants, licensing, etc. This all falls within CSR.

Charity accounts are subject to much oversight and scrutiny. If anything underhand was going on, we'd all know about it and the reputational damage it would cause the company would be massive.

[Ezra]

StevieBee said:

Former employee of one of the 'Big 10' charities (Barnardo's) and current experience that puts me in amongst some of the charitable / public sector and corporate cross-overs.

I'll feed your cynicism first. For the companies, because the donation is made at the point of sale, it's recorded as a sale. This gives the impression that sales are slightly higher than they actually are. This reflects positively amongst shareholders and investors, (despite the adage that turnover is vanity, profit is sanity). This is also why a few years ago the supermarkets started to ask if you wanted cash-back on your shopping when you paid with a card. Adding £20 at the till and handing that back to you in cash showed that you spent £20 more than you did, even though the supermarket didn't keep it. So, there is sometimes a commercial motivation at play. However.....

CSR is not just a fluffy, nice-to-have. Bigger companies are obliged to demonstrate social responsibility as part of planning applications, government grants, licensing, etc. This all falls within CSR.

Charity accounts are subject to much oversight and scrutiny. If anything underhand was going on, we'd all know about it and the reputational damage it would cause the company would be massive.

Excellent...thanks very much for the info - appreciate the detail.

[V8RAW]

A company donating to charity = lower corporation tax.

[s2kjock]

StevieBee said:

Former employee of one of the 'Big 10' charities (Barnardo's) and current experience that puts me in amongst some of the charitable / public sector and corporate cross-overs.

I'll feed your cynicism first. For the companies, because the donation is made at the point of sale, it's recorded as a sale. This gives the impression that sales are slightly higher than they actually are. This reflects positively amongst shareholders and investors, (despite the adage that turnover is vanity, profit is sanity). This is also why a few years ago the supermarkets started to ask if you wanted cash-back on your shopping when you paid with a card. Adding £20 at the till and handing that back to you in cash showed that you spent £20 more than you did, even though the supermarket didn't keep it. So, there is sometimes a commercial motivation at play. However.....

Are you saying that large commercial entities include donations customers make to charities via "top-ups" on till payments, and cash back (the customers' own money), in turnover in the statutory financial statements of these large commercial entities?

[StevieBee]

s2kjock said:

StevieBee said:

Former employee of one of the 'Big 10' charities (Barnardo's) and current experience that puts me in amongst some of the charitable / public sector and corporate cross-overs.

I'll feed your cynicism first. For the companies, because the donation is made at the point of sale, it's recorded as a sale. This gives the impression that sales are slightly higher than they actually are. This reflects positively amongst shareholders and investors, (despite the adage that turnover is vanity, profit is sanity). This is also why a few years ago the supermarkets started to ask if you wanted cash-back on your shopping when you paid with a card. Adding £20 at the till and handing that back to you in cash showed that you spent £20 more than you did, even though the supermarket didn't keep it. So, there is sometimes a commercial motivation at play. However.....

Are you saying that large commercial entities include donations customers make to charities via "top-ups" on till payments, and cash back (the customers' own money), in turnover in the statutory financial statements of these large commercial entities?

Turnover is the amount of money that enters the company so for retail, this is recorded at the point of sale. So as an absolute total, yes. It would be illegal for them to not show the proportion of that turnover that's attributable to donations or cash-back on statutory accounts. But, when they put out a press release saying that they've had a cracking month with £X turnover... up on previous months.... they're not obliged to provide a breakdown. This sort of messaging gives confidence to investors to invest or leave their money invested.

If we want to extend the cynicism, those companies could also claim to have donated £X to charity over the past year which puts them in a good light. Technically, such a statement is true because they have made that donation from their bank account..... but the detail shows that all they have done is 'facilitated' this.

Other than perhaps hoodwinking investors, there's nothing wrong with this. The charities are still benefiting and people are getting their cash-back.

I worked at Barnardo's in the mid 90s and several supporting companies took this approach. They'd pronounce their support for the charity on their marketing but was their customer's money that was being donated.

[s2kjock]

StevieBee said:

s2kjock said:

StevieBee said:

Former employee of one of the 'Big 10' charities (Barnardo's) and current experience that puts me in amongst some of the charitable / public sector and corporate cross-overs.

I'll feed your cynicism first. For the companies, because the donation is made at the point of sale, it's recorded as a sale. This gives the impression that sales are slightly higher than they actually are. This reflects positively amongst shareholders and investors, (despite the adage that turnover is vanity, profit is sanity). This is also why a few years ago the supermarkets started to ask if you wanted cash-back on your shopping when you paid with a card. Adding £20 at the till and handing that back to you in cash showed that you spent £20 more than you did, even though the supermarket didn't keep it. So, there is sometimes a commercial motivation at play. However.....

Are you saying that large commercial entities include donations customers make to charities via "top-ups" on till payments, and cash back (the customers' own money), in turnover in the statutory financial statements of these large commercial entities?

Turnover is the amount of money that enters the company so for retail, this is recorded at the point of sale. So as an absolute total, yes. It would be illegal for them to not show the proportion of that turnover that's attributable to donations or cash-back on statutory accounts.

I'm no expert on the International Financial Reporting Standards that most of these large commercial entities have to apply now (although perhaps not so in the 1990's) but do know a fair bit about UK Financial Reporting Standards.

The accounting treatment you are indicating was commonplace would actually be entirely inconsistent with UK accounting standards, and accounting convention in general.

[southendpier]

Many places would have a penny collecting box on the counter to put your change in.

Presumably now so many transactions are digital this is a way of simply collecting. It is a bit odd though first few times you see it - but you get used to it.