What really happens when you donate to charity at checkout? You asked, we answered

Almost every time Teresa Grimm, 72, goes grocery shopping in Menomonee Falls, the cashier asks her to donate to a cause, she says.

"I just always wondered: Does the money really get where they're telling me it's going?" Grimm asked Public Investigator. "Do they get a tax break?"

The short answer is yes and no.

Yes, the money customers donate at the cash register does go to the appropriate organization or cause, said Ross Milton, assistant professor of public affairs at the University of Wisconsin-Madison and tax expert.

"Assuming that they are following the law," Milton added.

And no, businesses can't receive a tax break for donations raised by customers, Milton said. If the donations aren't made with the business's money, it can't collect the tax benefits, Milton explained.

There are other cases where a store may offer a customer the opportunity to pick a charity, then put a percentage of the purchase toward the charity. In that case, the business is making a donation with its own money and can receive tax benefits, Milton said.

CharityWatch, a nonprofit group that investigates charities, raised one caveat, which is that stores don't have a deadline for submitting customers' donations to the charity.

"Ideally, the turnaround time is fast, but there are no standard rules that must be followed," said Laurie Styron, CharityWatch's CEO and executive director.

Another aspect that's unregulated is how much the customer's identity is shared with the charity after making the donation, Styron said.

"It would all depend on what information the store collects and how it tracks it, as well as the specific agreement it has with the recipient charity (if any) as it relates to disclosure of donor data," Styron said via email.

If the customer is a part of the store's reward system, then the store could share details like name, email address and phone number with the charity— even if the customer pays with cash, Styron said.

Customers who make donations through businesses can save their receipts for the tax benefits.

However, in order to write off charitable donations, the taxpayer has to be an itemizer and can't take the standard deduction, Styron said. Tax reforms passed under former President Donald Trump increased the standard deduction and reduced itemized deductions.

So if you prefer the standard deduction, there isn't a purpose for keeping the donation receipt, Styron said.

Grimm said she has pondered this question since before the pandemic and thanked Public Investigator for tracking down an answer for her.

"I'm reassured," Grimm said. "That's what I was hoping to hear."

More: Stores cannot use checkout charity funds to offset their own taxes

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Government corruption. Corporate wrongdoing. Consumer complaints. Medical scams. Public Investigator is a new initiative of the Milwaukee Journal Sentinel and its sister newsrooms across Wisconsin. Our team wants to hear your tips, chase the leads and uncover the truth. We'll investigate anywhere in Wisconsin. Send your tips to watchdog@journalsentinel.com or call 414-319-9061. You can also submit tips at jsonline.com/tips .

Gina Castro is a Public Investigator reporter. She can be reached at gcastro@gannett.com .

This article originally appeared on Milwaukee Journal Sentinel: What really happens when you donate to charity at checkout? You asked, we answered