Where Does Your Spare Change Go? The Truth About Round-Up Donations
This blog is based on the article “What Happens to the Money When I Round Up at the Register?” by Vox, written by Rebecca Schneid.
Have You Ever Wondered Where Your Donations Go?
If you’ve ever been at the checkout counter and been asked if you want to round up your total for charity, you’re not alone. Many people quickly say yes without thinking about it, while others wonder where the money really goes. Are these donations truly helping people, or are they just benefiting big businesses?
For immigrants in the U.S., especially those working hard to provide for their families, every dollar counts. It’s important to understand how these donation programs work, who benefits, and whether they actually support causes that matter to you.How Do Round-Up Charity Programs Work?
These donation programs started about 15 years ago and have become very common in stores like Walmart, Target, and grocery stores. The idea is simple:
A charity partners with a business (like a supermarket or gas station).
When you pay for your items, the cashier or payment machine asks if you want to round up your total to the next dollar.
The extra cents from every customer add up, creating a large donation for the charity.
These small donations might not seem like much, but they raised over $749 million in 2022 alone—more than double what was raised ten years ago.
Do Big Businesses Benefit From These Donations?
One common question is: Does the business get a tax break for your donation?
The short answer is no—but the truth is a little more complicated:
✔ The tax benefit actually goes to you, the customer, because it’s your money being donated.
✔ The business is just collecting the money and sending it to the charity.
✔ If the business adds its own donation (called a matching donation), then they can claim a tax deduction on that part.
However, most people don’t claim these small donations on their taxes. If you want to, you should keep your receipts and report them during tax season.
Are These Donations Really Helping People?
This is where things get tricky. There are no strict rules forcing businesses to tell the public how much money is raised or where it goes.
✔ Less than half of U.S. states have laws about charity promotions.
✔ Some businesses share reports on how much they collect, but not all do.
✔ Without clear information, it’s hard to know if most of the money is going to charity or to company expenses.
If you want to make sure your donation is making a real impact, it’s a good idea to research the charity before donating.
How Much of the Money Actually Goes to Charity?
There is no strict rule on how much of the donation must go to the actual cause. However, charity watchdog organizations like CharityWatch and Charity Navigator recommend that at least 65-70% of funds should go directly to programs, not to business expenses like salaries and marketing.
If you want to support a cause, it may be better to donate directly to a trusted charity instead of through a store.
Why Do Some People Feel Uncomfortable With Round-Up Donations?
Even though these programs raise a lot of money, many people feel pressured or unsure about them.
Feeling Forced to Donate
Many people feel like they don’t have time to think about the charity when they are rushing through checkout.
Saying "no" in front of a cashier can feel awkward or embarrassing.
Not Enough Information
Most stores don’t tell you where the money is going—they just ask if you want to donate.
Without details, customers can’t make an informed choice.
Big Companies May Benefit More Than Charities
Some people worry that businesses use these programs to look good without actually donating their own money.
Some businesses donate very little themselves and rely on customers to give instead.
Should You Donate or Not?
This is a personal decision, but if you want to give wisely, here are some tips:
✔ Do your research – Look up the charity on Charity Navigator or CharityWatch before donating.
✔ Keep receipts – If you want to claim donations on your taxes, keep proof of your contribution.
✔ Donate directly – If you care about a cause, giving directly to the charity makes sure more of your money reaches the people who need it.
✔ Look for transparency – Support companies that publicly share how much they raise and where the money goes.
Even small donations add up over time. Whether you choose to round up or donate in other ways, the most important thing is being informed and making sure your money supports a cause that truly helps people.
So next time you're at checkout and see a round-up request, you'll know exactly what’s happening behind the scenes—and you can decide what’s best for you.