Would you like to round up your transaction and donate to a charity? Woolworths asks me this question every time I go through their checkouts.
It’s a tough one. Like when approached by charity representatives, it creates an uncomfortable moment. You have to assess the worth of the cause, the depth of your bank account, and any other donations you may have made recently.
Supermarket donations are tiny, though, because they only ever ask you to round up your donation to the nearest dollar. The mental burden of deciding whether you’d like to donate is hardly worth the donation itself, and maybe that’s why it’s so popular. Woolworths raised $6 million last year, Crikey understands.
The only problem here, though, is the tax treatment.
ATO says hey-ho!
In Australia, donations under $2 are not tax deductible. So when you donate at a checkout, it can’t be claimed as a tax deduction — Woolies will give you a receipt for your donation, but it’s too small to claim. Your donation comes from after-tax income, not before tax.
The ATO gets paid and the charity does too. Whether you find this agreeable or not may depend on how much you like paying tax!
I had wondered if Woolies might be collecting all those tiny deductions and deducting them itself, but that was too cynical of me — it says the money is passed on directly to the charity, with no admin fee.
That’s a lot of after-tax money. If it had been donated to charity as larger lump sums over $2, there would have probably been $1-2 million in tax deductions that could have been claimed, assuming a marginal tax rate of 15-30% among donors.
Who gets the cash?
Most of the money Woolies customers donate at the checkout goes to OzHarvest. OzHarvest looks like a very worthy cause: they collect food that is going to waste and donate it to the hungry. The donations help them administer the program.
It says that 50 cents help them deliver a meal. If the food is free and the delivery costs are 50 cents, it sounds like incredible value.
Does it make sense?
Does this add up, or is society, via donations, spending a fortune to cart around expiring produce, all to assuage our guilt over wasting food?
Trying to use food waste usefully may be in conflict with reducing food waste at its source. The food-relief sector has been lobbying for a tax deduction for donated food. KPMG has written a report arguing for changes, including a 200% tax deduction to be made available for anyone who donates. Would that encourage companies to run their supply chains in a way that avoids waste?
Is this charity just Woolworths greenwashing its own wasteful practices? It certainly seems to be the case that it can claim a tax deduction on food it donates, even if they don’t get one on the customer donations they pass on.
OzHarvest helps a lot of people. But how much does it help Woolworths? We may observe that a Woolworths managing director is on the board of OzHarvest, alongside people from several very powerful firms — such as a lawyer from Allens, a partner from PwC, a partner at Bain & Company, a director of Facebook, and a former CEO of PR firm Publicis.
This is not a grab-bag of hippies in chunky knits. It’s probably a sign that either the charity is run with optimal professionalism, but it could also indicate that has been captured by corporate Australia and is not really interested in rocking the boat, upending poverty or forcing supply chains to reckon with the implications of their own wastefulness.
Coles doesn’t use OzHarvest. Instead it has its own food-rescue organisation called SecondBite (its board has a similar profile, although it also boasts cravat-sporting former MasterChef judge Matt Preston). Both it and Woolworths donate to a third food-relief charity called Foodbank.
Do the charities whose task is to feed the hungry day in, day out really prefer an unpredictable stream of food donations that may need to be used urgently? Or would they prefer a more reliable source? The kind of fresh produce that doesn’t sell is whatever is abundant at the time and therefore cheap. And when food is expensive and in shortage, supermarket leftovers become scarce.
There are a lot of hungry people in Australia. Feeding hungry people recycled food is better than throwing out waste while they starve. But it’s not exactly utopian. Trying to redirect unwanted food may be a strategy you take when you’ve accepted defeat on fighting poverty.
I believe there’s a very human sort of error that we make when focussing on not throwing things out. This is why people love recycling so much, even though we sort of know much of what we try to recycle is actually in a shipping container in a warehouse somewhere, and we could do far more to help the environment by reducing consumption.
We focus on what we can see. You can see a dumpster of food at the back of a Woolworths. You can’t see prevented waste. People prefer to focus on getting the food out of the dumpster, not stopping getting it in there in the first place. But that doesn’t ensure people in poverty are fed properly.
OzHarvest does do work to try to reduce food wastage upstream. It has various programs other than food recycling.
Solving hunger and reducing food waste are both admirable goals. And trying to solve them both simultaneously is clever… up to a point. But it may limit our ability to solve either properly. After all, when food is scarce is when people are hungriest and waste is least.
The most acute hunger can’t be solved by collecting supermarket waste. Indeed, the federal government gave OzHarvest money in the pandemic to keep up its activities.
