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    2 Replies Latest reply on Apr 19, 2011 6:31 PM by sammythesm

    can a business receive its profit from donations towards charity?

    tanandforbes Newbie

      A business where they receive a partial percentage of a certain amount of the donation towards a cause.

       

       

      Would there be legal disclaimers stating so otherwise?  I always thought that there would have to be particular legal agreements when donating to charity.

       

       

      eg.  " 15% of your donation will go towards charity " 

        • can a business receive its profit from donations towards charity?
          LUCKIEST Guide

          Talk to both YOUR accountant and YOUR lawyer

          • can a business receive its profit from donations towards charity?
            sammythesm Wayfarer

            Credit card companies do this all the time.  They take 1-3% of every transaction no matter who it goes to.  So as long as you're set up as an intermediary, I don't see how it's illegal. 

             

            Now, taking 15% of every transaction, hopefully you are creating a LOT of value for the charity (i.e. finding donors and increasing the donation pool faster than they could do it themselves).

             

            Most charities account for these administrative costs and are transparent with their donors about them in their financial statements and filings whether they do the work themselves by hiring people, or by paying outside consultants/firms.  Most people favor giving to charities with low or no overhead costs.  So you will have to do more research in this space and see what is reasonable and customary, and you'll have to demonstrate to whatever charity you are trying to partner with what the value is for your services.