New Effort Gives Tech Workers Additional Way to Donate to Charity (opens in new tab)

(bits.blogs.nytimes.com)

13 pointsdarrellsilver11y ago13 comments

13 comments

I put a policy in place at my company that the company would match charitable donations 2:1 up to $5,000 (you put in $5K and we put in another $10K). We match 1:1 after that (though if someone went nuts we'd cap it). Predictably, charitable donations went up.

Seems like other companies could do the same thing and now it is more of a grass roots crowd sourced thing.

protomyth11y ago

I see their faq says:

  Will people know how much I donate or who I donate to?
    No. That’s confidential

I do wonder what happens when they get hacked. Also, it would be nice if they added American Indian College Fund to their education list http://www.collegefund.org

korzun11y ago

Why would I funnel donation money via a third party who will then get a tax write off?

Seriously?

dcaranda11y ago

@korzun My name is Danny and I'm a co-founder of RaisedBy.Us. Thanks for your question!

Regarding the 3rd party issue: All donation methods (RaisedBy.Us or otherwise) involve a third party. Even when you go directly to a charity's website to make a donation, you will use a third party payment provider. The most common method is debit or credit card. This method actually involves multiple third parties that all take fees (an issuing bank, a merchant bank, a settlement bank and a network such as VISA, Mastercard, Discover, etc). This fee is called interchange and it typically inovlves a flat fee of 30 cents per transactions plus about 2.5% to 3% of the total value of the transaction. We thought this was pretty expensive. Donations through RaisedBy.Us charge 0% and no flat fee per transaction. We accomplish this by using a back-end provider that settles transactions with charities using checks and ACH methods (which are much cheaper the credit and debit transactions) and we charge the companies (not the donors) to access the service.

Regarding tax write off: RaisedBy.Us does not get a tax write-off for the donations that are processed through our program. Only the initial donor (e.g., an employee at one of our participating companies) gets a tax write-off for donations.

korzun11y ago

I'm aware of processing fees, to avoid it you can simply cut a check or do a bank transfer from your personal account when donating.

But I'm also pretty sure a non-profit can write off processing fees so it's not really an issue.

How would the employee get tax write off if the money is send to your company which is not registered as 501(c)?

For example if you claim a deduction on your taxes and get audited, would IRS be cool with 'I send money to XYZ which is not a 501(c) but they send it to actual charity, I swear'.

Offering receipt of donation to every company employee would work (I think), but I'm not sure if you are doing that?

1 more reply

dsjoerg11y ago

What are you talking about? "RaisedBy.Us does not take a cut of any donations, but is simply the platform through which employees can donate." -- from TFA

EDIT: Why do you think they would get the write-off and not you?

korzun11y ago

Even if they do not take a cut, they will still get a fat check from every tax deductible donation you will make thought them.

I rather donate my self, keep the tax deduction and donate that again instead of giving it away to a third party.

darrellsilverOP11y ago

Yeah – it's an easier way to do donations, but the tax implications and fees are the same as always. It even comes out of your paycheck pre-tax... making your tax end simpler as well.

korzun11y ago

On their page it states that it comes out as post tax deduction. They are not a non-profit institution.

1 more reply

tannranger11y ago

Really like this idea, great job!

j / k navigate · click thread line to collapse

13 comments

luckydude11y ago

Seems like other companies could do the same thing and now it is more of a grass roots crowd sourced thing.

protomyth11y ago

I see their faq says:

  Will people know how much I donate or who I donate to?
    No. That’s confidential

I do wonder what happens when they get hacked. Also, it would be nice if they added American Indian College Fund to their education list http://www.collegefund.org

korzun11y ago

Why would I funnel donation money via a third party who will then get a tax write off?

Seriously?

dcaranda11y ago

@korzun My name is Danny and I'm a co-founder of RaisedBy.Us. Thanks for your question!

korzun11y ago

I'm aware of processing fees, to avoid it you can simply cut a check or do a bank transfer from your personal account when donating.

But I'm also pretty sure a non-profit can write off processing fees so it's not really an issue.

How would the employee get tax write off if the money is send to your company which is not registered as 501(c)?

For example if you claim a deduction on your taxes and get audited, would IRS be cool with 'I send money to XYZ which is not a 501(c) but they send it to actual charity, I swear'.

Offering receipt of donation to every company employee would work (I think), but I'm not sure if you are doing that?

1 more reply

dsjoerg11y ago

What are you talking about? "RaisedBy.Us does not take a cut of any donations, but is simply the platform through which employees can donate." -- from TFA

EDIT: Why do you think they would get the write-off and not you?

korzun11y ago

Even if they do not take a cut, they will still get a fat check from every tax deductible donation you will make thought them.

I rather donate my self, keep the tax deduction and donate that again instead of giving it away to a third party.

darrellsilverOP11y ago

Yeah – it's an easier way to do donations, but the tax implications and fees are the same as always. It even comes out of your paycheck pre-tax... making your tax end simpler as well.

korzun11y ago

On their page it states that it comes out as post tax deduction. They are not a non-profit institution.

1 more reply

tannranger11y ago

Really like this idea, great job!

j / k navigate · click thread line to collapse