You're checking out at the grocery store when the clerk asks if you'd like to throw in a buck or two for a worthy cause. Good idea or peer pressure run amok?
Maybe a little of both, says Sandra Miniutti, of Charity Navigator, a charity watchdog group. Adding a few dollars to your grocery tab might help a group in need, but the gesture means giving away control of your charitable decision. "It's better to look for a charity that matches your passion, not that of the store."
Further, you can't vet a charity's effectiveness while you're juggling the milk and bananas, nor are you likely to develop a relationship with the group you're giving to, a hallmark of good giving. Plus, "people give less to other charities because they see the donations as a substitute," says Miniutti.
As with any charitable contribution, cash-register donations are subject to administrative costs. The Safeway Foundation, which raises money for prostate-cancer research, among other causes, devotes about 2% of donations to expenses related to the annual drive. (The recipient, the Prostate Cancer Foundation, passes along the entire amount to research.) If you itemize deductions on your tax return, you get to declare the donation as long as it goes to a qualified organization and the donation shows up on your receipt.