Why nobody gets a tax benefit when you donate at the checkout

It happens almost every time you pull out a wallet to pay for groceries, a coffee or a cheeseburger.

A friendly face on the other side of the till asks if you would like to donate an extra loonie or toonie to charity. If you nod your head in agreement, the cashier adds an additional few dollars onto your transaction.

The practice is called point-of-sale fundraising, as the charitable donations are funnelled through retailers at the final point customers make their purchases.

All that extra change brings in big money for charities, but it does not give individual Canadians the same tax benefits as donating directly to charity without a cash register in between.

In 2021, grocery chains Metro and Calgary Co-op collectively brought in more than $5.5 million for food banks, emergency shelters, cancer research and hospitals in Quebec, Ontario and Alberta.

So who gets to write all those donations off their income? Customers or retailers?

The correct answer, according to accounting and charity experts, is neither. When it comes to checkout philanthropy, in Canada, no one gets a tax benefit. 

"The individual [customer] would need to donate directly to the charity to obtain a receipt," wrote Toronto-based chartered accountant Brian J. Quinlan in an email to CBC Radio's The Cost of Living.

"It would not be ethical for the grocery store to request a charitable receipt as it is not donating its own money."

Even so, some non-profit organizations say there are big benefits when retailers ask you for change at the checkout.

"It is the cheapest way for charities to raise money," said Gena Rotstein, principal at Karma & Cents, a Calgary-based consultancy that advises on philanthropy. 

According to Rotstein, there are major savings for non-profit organizations.

"They're not issuing the tax receipts. They're not tracking down donors. They're not writing thank you notes, all the stuff that costs money to raise money," she said. 

A lot of time, planning and labour go into more traditional fundraising efforts, such as canvassing door-to-door, or putting on a glitzy gala.