ST. LOUIS (KMOV.com) -- It's a question many cashiers are asking customers around the St. Louis region, "Would you like to round up?" It's often asked as you're checking out at the store or paying at a drive-thru. Local grocery stores, fast food restaurants, and even pet stores offer customers a chance to make a charitable donation at the checkout.
News 4's Chris Nagus was recently asked if he wanted to "round up" at a Missouri Taco Bell. He was told his 48-cent donation would benefit education and students. It might not seem like a lot, but according to tax filings with the IRS, the Taco Bell Foundation brought in millions of dollars through the generosity of its customers. According to its 2018 990 Form, the Taco Bell Foundation brought in nearly $14 million.
Joe Waters runs Selfish Giving, an organization that helps businesses partner with nonprofits to raise money at the point of sale.
"They are becoming really popular," Walter said. He said a recent partnership with an East Coast chain with 120 locations brought in approximately $450,000 worth of round up donations in just three weeks. Walter added, "Most people are pretty positive about it," referring to round up campaigns in general, but adds, "Some would argue in supermarkets they have been overdone, too much asking at the register."
Saint Louis University law professor Henry Ordower is an expert in tax law and he's not the biggest fan of round up campaigns, but it's not because he doesn't like donating to charity. Ordower feels like the asks are often vague, and don't offer specifics about where the money actually goes. He also feels like it puts consumers on spot and, "You're embarrassed to say no."
In the case of the Taco Bell Foundation, you're asked to help fund educational opportunities for students and Taco Bell employees. However, 990 forms also reveal administrators make large salaries, including a $255,000 combined income in 2018 for the foundation's executive director. Another senior official made approximately $200,000 that same year, according to 990 filings.
In addition to donating to students, 990 forms reveal the foundation also donates to other charitable causes, including the YMCA in Rapid City South Dakota and the Denver Zoological Foundation. Even if you believe these are great causes, they might not be top of mind when you decide to donate.
"You have no idea where the money is going," Ordower said.
According to Ordower, the business does not get a tax benefit from the donations, but it does get a public relations benefit. "They are advertising they are providing a charitable contribution, but it's not coming out of the corporate coffers," added Ordower.
Ordower says consumers can actually save their receipts and tabulate round up contributions as tax deductions, even if you don't itemize your taxes. He says you can deduct up to $300 in cash contributions (credit cards count) for tax year 2020.
According to a Taco Bell spokesperson, four scholarships were awarded to students in the St. Louis region in the year 2020. Those scholarships went to consumers and Taco Bell employees.
Taco Bell claims the money paid to the executive director does not come from cash contributions but from Taco Bell corporate coffers. Here is there statement:
Taco Bell Corp.’s payment is reflected as a charitable contribution in the Taco Bell Foundation’s records. The Executive Director compensation is always listed on the Taco Bell Foundation’s 990s for transparency.