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Donate a dollar at the register? Checkout charity is big business for nonprofits

Published Sep. 2, 2013

It happens at stores everywhere. A cashier asks you to donate a dollar or two to charity while you're standing at the cash register.

Some shoppers sheepishly grumble something about "not today" and make a dash for the door. Many others give the dollar, either out of guilt or a benevolent heart.

Checkout charity, as it's sometimes called, has become big business for nonprofits and retailers. Charities love it because it raises money from the masses at little cost. Companies love it because it makes them look caring and generous, even if it comes on the backs of customers.

The concept isn't new but has become so commonplace at grocery stores, drug stores and even restaurants that some shoppers now come to dread it.

"If there's a bunch of people in line behind me and the cashier asks me to make a donation, it makes me feel so trapped and judged, especially if it's for the troops," said Jennie Blackburn of Redington Shores, who frequently gets solicited at Walgreens and Publix. "It's a lot of pressure."

Earlier this year, Cause Marketing Forum, which helps charities and companies on fundraising partnerships, analyzed the 63 checkout campaigns nationwide that earned at least $1 million in 2012. Combined, they raised $358.4 million — more than a dollar for every American.

Mass merchandise and big box stores (Walmart, Costco Wholesale, Kmart, JCPenney) raised the most money, followed by online retailers (eBay and Apple), supermarkets (Safeway, Publix) and restaurants (McDonald's, Chili's, Wendy's).

Companies used various tactics, from direct solicitations at the checkout to asking shoppers to buy a paper pink ribbon or green shamrock to hang in the store. Penneys asked customers to round up their purchase to the next buck and raised $10.4 million in six months.

• • •

What makes checkout fundraisers so successful? Leslie Lenkowsky uses the example of Willie Sutton, the famous bank robber from New York. When asked why Sutton robbed banks, he supposedly said: "That's where the money is."

People are more inclined to give when their wallets are already open, said Lenkowsky, a professor of philanthropy and nonprofit management at Indiana University.

"If you can piggyback on that and appeal for a little extra, then that's fine," he said. "It can be annoying and coercive, but the amount we raise through individual gifts is staggering."

Americans gave more than $316 billion to charity last year, according to Indiana University's Giving USA 2013 report. The majority came from individuals; just 6 percent came from corporations.

Tough times have forced charities to look for inventive, inexpensive ways to raise money, Lenkowsky said. They are cheaper than direct mailers or special events and can continue indefinitely.

But they aren't without pitfalls. Checkout campaigns don't allow charities to make followup requests, an important aspect for ongoing fundraising efforts. Charities get the money but no information about the donors.

Charity watchdog experts don't oppose checkout campaigns but advise shoppers to exercise caution and give only to well-known charities with good track records, like the American Red Cross or March of Dimes.

"We encourage people to be more thoughtful, do some research and find out what the charity is accomplishing," said Daniel Borochoff, president of CharityWatch based in Chicago.

To better assure that your money is going to the right place, Borochoff recommends giving to a charity directly. Donating through a retailer runs the risk of the money getting lost or diverted. Consumers don't get the tax deduction and have no idea when the donation actually gets to the charity.

Stores generally don't take a cut of checkout campaigns or charge a fee to the charity. However, in some cases, charities might pay a retailer a monthly fee to put a collection box at the register to give stores incentive to keep better track of the money, Borochoff said.

Publix, for example, says it donates 100 percent of register proceeds to specific charities and doesn't take a tax write-off on the collections because the money came from customers. This year, its Special Olympics campaign raised $2.1 million from shoppers and employees.

• • •

Pat Mundy of Spring Hill said she gives occasionally but feels uncomfortable being solicited every time, especially when a local charity or school group asks for money at the door. She also wonders why companies, if they are so eager to be good corporate citizens, don't give more and pay their executives less.

"It gets to be too much," she said. "You can't continually give. Our donation funds are limited and our general rule is we give through our church because we know where our money is going."

The very nature of checkout campaigns preys on our worst instincts, Borochoff said. We make snap decisions under pressure without doing our homework.

Customers often say it's harder to refuse a verbal request at the checkout than a Salvation Army bell ringer standing outside a store or a Toys for Tots collection box. But say no to a Walgreens cashier asking you to buy a 99-cent candy bar to help wounded soldiers and you can feel like a schmuck.

Joe Waters, who founded selfishgiving.com, a Boston-based website about nonprofit and corporate partnerships, said point-of-sale fundraisers are here to stay but will evolve as consumers grow weary of them. He expects more campaigns that offer incentives, such as discounts, or campaigns tied to credit card machines, similar to one at PetSmart, which asks shoppers to donate to homeless pets when they swipe a credit card.

"The great thing about the credit card machine is that it always asks," Waters said. "It doesn't get busy and it doesn't forget."

Lenkowsky, the philanthropy professor, said checkout charity will continue until someone comes up with a better idea, much like what happened to telemarketing. Overall, it appeals to the good motives of people.

"The fact that people are willing to give is very healthy for society," he said. "(The campaigns) can look pretty manipulative, up close and personal, but the dollar you gave at the checkout could help some kid with cancer."

News researcher John Martin contributed to this report. Susan Thurston can be reached at sthurston@tampabay.com or (813) 225-3110. Follow her on Twitter at @susan_thurston.

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