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Buying from Goodwill - Deductible?
Old 02-20-2017, 01:17 PM   #1
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Buying from Goodwill - Deductible?

My DW and I usually shop at our local Goodwill on 'senior day' and we probably spent close to $200 last year. I just assumed it was all deductible since the money is going to Goodwill but is it really deductible? I've searched for an answer but no luck so far.

Thanks.
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Old 02-20-2017, 01:18 PM   #2
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i seriously doubt it
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Old 02-20-2017, 01:24 PM   #3
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Heck no. Goodwill is a very viable business paying their CEO a $ 7 digit salary.

They're not what I'd call a real charity helping many people--like the Salvation Army.

Purchases are certainly not tax deductible.
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Old 02-20-2017, 01:30 PM   #4
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It's not deductible if you receive goods at fair value in exchange for money from a nonprofit.. Even charities that give a donor something for a donation have to subtract the fair market value of that item from the donation, this does not include the charity magazine or access to the charity's venues.
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Old 02-20-2017, 01:41 PM   #5
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As others have mentioned... not at all...


Think of this in a different light.... say you go to a hospital that is a charity and they do surgery on you.... is that a charity donation I do not think even you would say it was... no different when you buy stuff...


The ONLY way it would be a charitable deduction is if you paid more than what it was worth.... IOW, the top animals at the Houston Rodeo go for way more than what a normal animal would be sold for.... a steer can fetch $300,000... now, usually the person who buys the steer gives the meat away so they get the full deduction, but if they did not give it away you would have to subtract what a normal steer would sell for to get the deduction...


Edit... well, it looks like the record is $460,000 for a steer... have to go down in the article...

http://www.chron.com/news/houston-te...eo-4359998.php
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Old 02-20-2017, 01:53 PM   #6
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If it was deductible I could see a tremendous opportunity. However it's not.
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Old 02-20-2017, 01:53 PM   #7
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Not deductible for OP because OP received an item with a value equal to what they gave to them... IOW an exchange transaction and not a donation.

According to their 2015 Form 990, CEO comp was "only" a little over $700k... not 7-digits.

~$45m of revenue.

http://www.goodwill.org/wp-content/u...m-990-2015.pdf
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Old 02-20-2017, 01:54 PM   #8
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Quote:
Originally Posted by Bamaman View Post
Heck no. Goodwill is a very viable business paying their CEO a $ 7 digit salary.

They're not what I'd call a real charity helping many people--like the Salvation Army.

Purchases are certainly not tax deductible.
Donations are tax deductible, purchases are not.

Not sure if you're saying Goodwill isn't a real charity but Salvation Army is, or that neither are.

I don't think either is particularly better than the other. Both have CEOs making a 6 (not 7) figure salary, at least as of a couple of years ago. I think Goodwill's CEO is higher on the 6 figure list, but what's a few $100K here or there? I think Goodwill is a for profit organization, while SA is a Christian based non profit. On the other hand, SA has had issues with discrimination based on sexual preferences. So make your own choice. There are probably better organizations from an actual charity POV to donate to than either of these. But both are an excellent place to get rid of your stuff you no longer want.
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Old 02-20-2017, 01:55 PM   #9
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They are both not-for-profits.
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Old 02-20-2017, 02:05 PM   #10
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Goodwill Industries is a not for profit enterprise, executive compensation is available on Form 990. Salvation Army is also a not for profit enterprise, but registered as a religious organization, and not subject to the same disclosure requirements, so does not publish Form 990.
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Old 02-20-2017, 02:05 PM   #11
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Originally Posted by pb4uski View Post
Not deductible for OP because OP received an item with a value equal to what they gave to them... IOW an exchange transaction and not a donation.

According to their 2015 Form 990, CEO comp was "only" a little over $700k... not 7-digits.

~$45m of revenue.

http://www.goodwill.org/wp-content/u...m-990-2015.pdf
Wow, only 700k. However not too shabby for a 45m charity. About 1.5% of revenue just to pay the CEO. Thanks for the research pb4uski .
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Old 02-20-2017, 02:20 PM   #12
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Wow, only 700k. However not too shabby for a 45m charity. About 1.5% of revenue just to pay the CEO. Thanks for the research pb4uski .
According to Forbes, 2015 Revenue for Goodwill was $5.6 BILLION.

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Old 02-20-2017, 02:25 PM   #13
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That $45M in revenue seemed low. Here's what I've found:

Forbes - Goodwill Industries International

Quote:
Numbers

Highest Compensation: $689,418
Total Revenue: $5,600 M
Government Support: $499 M
Private Donations: $902 M
Other Income: $4,199 M
Total Expenses: $5,441 M
Charitable Services: $4,805 M
Management & General: $608 M
Fundraising: $28 M
Surplus/Loss: $159 M
Charitable Commitment: 88%
Fundraising Efficiency: 97%
Donor Dependency: 82%
Fiscal Year ending on Dec 31, 2015.
Forbes - Salvation Army

Quote:
Numbers

Highest Compensation: $255,051
Total Revenue: $2,927 M
Government Support: $352 M
Private Donations: $1,904 M
Other Income: $670 M
Total Expenses: $3,537 M
Charitable Services: $2,893 M
Management & General: $415 M
Fundraising: $229 M
Surplus/Loss: -$610 M
Net Assets: $10,272 M
Charitable Commitment: 82%
Fundraising Efficiency: 88%
Donor Dependency: 132%
Fiscal Year ending on Sep 30, 2015.
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Old 02-20-2017, 03:11 PM   #14
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When you buy that awesome nehru jacket for $12, you receive $12 of awesome clothing value, so nothing to deduct. When I donated that jacket, I deducted $12 on schedule A.
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Old 02-20-2017, 05:24 PM   #15
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They are both not-for-profits.
But to clarify further, do not confuse non-profit or not-for-profit organizations with being a charity.

One can not assume that a non-profit is a charity, heck, I've been the treasurer of several non-profits, and not a single one was an official charity where donations are deductible on one's income tax return. The terms are NOT synonymous.
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Old 02-20-2017, 05:44 PM   #16
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True, there are charitable non-profits and others that are not charitable. I would have to look at the 990 but I suspect Goodwill is a charitable non-profit.

ETA: Their 990 indicates that they are a 501(c)(3)... charitable not-for-profit.
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Old 02-20-2017, 06:49 PM   #17
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My experience with GW, in WI, has been fairly good. They raise a lot of their money themselves. For example, they had a contract with Great Lakes Academy (not sure Navy or CG). GW clients were employed in food service and laundry. Clients and GW made money. The same was true for special projects at our company when we sourced GW for labor.

The approach is to build businesses, such as their stores, so they don't rely as much on donations. When I was consulting with NGOs, I would use GW as a model for funding the organization. Instead of relying on donations, find a way to create a 'program' that has value to people.
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Old 02-20-2017, 09:05 PM   #18
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Too bad you can't make a purchase and donate it back to get a double deduction.
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Old 02-20-2017, 10:05 PM   #19
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Goodwill is where I usually dump the junk I try and sell on craigslist but nobody wants. They seem happy to take it, wonder how much of it they end up giving away or trashing.
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Old 02-20-2017, 10:41 PM   #20
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Goodwill is where I usually dump the junk I try and sell on craigslist but nobody wants. They seem happy to take it, wonder how much of it they end up giving away or trashing.
Lots of clothing folks give thinking it will be worn by someone needing it, often ends up being sold by the ton to end up as rags or shipped to poor countries where some middle men end up selling the crappy t-shirts for a dollar or less.

Better than a landfill.
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