August 26, 1999 | Read Time: 2 minutes
An on-line charity shopping site, iGive.com, has made changes in the way it processes purchases and donations — mainly in the hopes that doing so will allow customers to take a tax deduction for the portion of their purchases that are donated to charitable organizations.
The iGive.com company, in Evanston, Ill., negotiates rebate agreements with on-line retailers, such as eToys, jcrew.com, and LandscapeUSA. When customers use the iGive.com Web site to buy products from participating companies, the companies send the rebate to iGive.com, which keeps about half of the rebate and sends the other half to a charity designated by the customer.
For many customers, the amounts that are donated to their charities are small. For example, a $40 purchase from Books.com results in a $2.40 contribution.
The company’s new record-keeping system provides customers with detailed information about how much money their purchases have generated for their charities and when the donation checks have been sent. Customers who have signed up with iGive.com each have a password-protected page on the site where they can review their purchasing and donation records.
The Internal Revenue Service requires that contributions be voluntary in order to be deductible, so iGive.com is giving customers the option of keeping the rebate for themselves, rather than donating it to charity.
“We don’t expect very many people to do that,” says Robert Grosshandler, founder of iGive.com, “but in order to make this work you have to give them that control.”
The company relied on a 1996 I.R.S. ruling for guidance in developing the new record-keeping system. In that ruling, the service found that credit-card holders could claim a charitable deduction for rebate amounts the credit-card company donated to charity in the customers’ behalf (Letter Ruling 199623035).
FOR MORE INFORMATION: Go to http://www.igive.com.
