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Is it worth donating clothes?

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rated:
I will say up front, I have little experience in "charitable donations" and will be donating my clothes regardless. I have too many that I have no use for, and I try to limit what I throw in the garbage. My question is, should I take it to a place that will give me a receipt? Is that even worth my time? I have about 30 articles of clothing to give. I file itemized deductions on my taxes. Thanks.

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rated:
InFlamed said:   I will say up front, I have little experience in "charitable donations" and will be donating my clothes regardless. I have too many that I have no use for, and I try to limit what I throw in the garbage. My question is, should I take it to a place that will give me a receipt? Is that even worth my time? I have about 30 articles of clothing to give. I file itemized deductions on my taxes. Thanks.
Yes, I find it to be worth it.

Good Will gives a generic receipts with total of bags/boxes etc..

It's your responsibility to prove your donations (worth).  I take a picture of the items and use "It's deductible" through TurboTax.

It's free money for items I was going to trash anyway.

Good luck. 

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In many places the Salvation Army (satruck.org) picks up donations of value from homes and businesses. Not as picky and condescending toward donors as Goodwill, in my experience.

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It depends on the clothing in question, but if you just assume we're talking basic used shirts/ pants and you value them at $4 each then thats $120 donated. In the 15 or 25% tax brackets that $120 deduction gets you $18 or $30 extra back in your tax refund. And you could get much more for higher value stuff.

Whats your alternative? $0 value for throwing stuff in the trash and wasting good clothing?

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It's definitely worth donating the clothes. But claiming the deduction is up to you.

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My relative scrambles every December to get a couple hundred dollars worth of donated items to Goodwill, so he can claim it on that year's taxes.  He's oblivious to the fact that it doesnt matter, since every year, he takes the standard deduction anyways.

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Glitch99 said:   My relative scrambles every December to get a couple hundred dollars worth of donated items to Goodwill, so he can claim it on that year's taxes.  He's oblivious to the fact that it doesnt matter, since every year, he takes the standard deduction anyways.
  
Most people don't understand the difference between deduction and credit or the standard deduction threshold. 

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smarteconomist1 said:   In many places the Salvation Army (satruck.org) picks up donations of value from homes and businesses. 
  SA is douchy about their pickup times and won't even open up a fence gate. I wouldn't arrange my schedule around them if it means you need them to go into your house to pickup furniture or something heavy.
It's your responsibility to prove your donations (worth).  I take a picture of the items and use "It's deductible" through TurboTax
if you're below the $500 threshold for filling out form, has anyone been audited on this? I guess if you're donating four or five figures of stuff a year that might attract attention ...

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Tip: Goodwill will probably write "X bags of clothing" on the receipt. Shopping bags are MUCH smaller than garbage bags.

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Rajjeq said:   Tip: Goodwill will probably write "X bags of clothing" on the receipt. Shopping bags are MUCH smaller than garbage bags.


Our goodwill leaves it blank.

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Would appreciate the opinion of the FW hive mind:

If the IRS audits you, is this something they could check?

What's preventing people from writing $300 on their blank receipt after donating $10 worth of clothing?

Since it's a receipt, isn't it proof?

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I think you're safe with $500 as ruffles said. I used a CPA a couple of years back and noticed that he put $500 on that line. I had always used a deduction program to calculate it. My returns were usually $125-200.

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gremln007 said:   I think you're safe with $500 as ruffles said. I used a CPA a couple of years back and noticed that he put $500 on that line. I had always used a deduction program to calculate it. My returns were usually $125-200.
 Above $500 the IRS requires more detail - and if I recall, an additional form.   

 BTW, if I were a low-level IRS "intake" employee (or computer, for that matter) and I saw returns coming in year after year from Taxpayer X showing exactly $500 for this particular Schedule A line - I might possibly flag this return for "further examination".   So if you're estimating about $125 - $200 annually for this, and your CPA is listing exactly $500 annually, consistently, year after year - is your CPA really helping you out on this (admittedly small) issue?

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fw9999 said:   
gremln007 said:   I think you're safe with $500 as ruffles said. I used a CPA a couple of years back and noticed that he put $500 on that line. I had always used a deduction program to calculate it. My returns were usually $125-200.
 Above $500 the IRS requires more detail - and if I recall, an additional form.   

 BTW, if I were a low-level IRS "intake" employee (or computer, for that matter) and I saw returns coming in year after year from Taxpayer X showing exactly $500 for this particular Schedule A line - I might possibly flag this return for "further examination".   So if you're estimating about $125 - $200 annually for this, and your CPA is listing exactly $500 annually, consistently, year after year - is your CPA really helping you out on this (admittedly small) issue?

  With the budget cuts to IRS, I don't think they're going to waste man power on $500 deduction which is like $100-$200 worth of unpaid taxes. Plus , I imagine a lot of people donate more than $500 of many random misc items and don't want the hassle to document each one

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Agreed. I didn't like that he did 500 honestly. However, I had a lot of donations that year. Enough to justify 500? I'm not sure and didn't check.

I only used a CPA once so I'm back to the usual estimates.

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I believe there was a thread about this on Bogleheads a few years back.  To answer your questions of from people who went through the audits.
If the IRS audits you, is this something they could check on?
Yes.
What's preventing people from writing $300 on their blank receipt after donating $10 worth of clothing?
The burden is on the taxpayer to prove the value of the donation.
Since it's a receipt, isn't it proof?
Not really.  It was said that technically the IRS can ask for proof of your purchase of the item to value the item donated.


The takeaways from the thread were (for clothing and household  goods):

1. Get a dated receipt from a repeatable charity 
2. Document your donated items by count on the receipt.
3. Take a few pictures of the items (outside of the bags) with you phone
4. Save both 2 & 3 in your tax file.

Technically that doesn't meet the extreme threshold the IRS could require, but it is generally accepted as enough.

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Goodwill has a site that you can keep track of your donations throughout the year.  It will also give you an estimated value.  I find this Handy as I bring many items in all year long.

https://www.amazinggoodwilldonationreceipt.com/
 

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For what it's worth, I've been donating clothes and other household items to Goodwill and taking credit for it on my taxes for decades.  As a previous poster mentioned, it only matters if you itemize deductions.

I think most people would be shocked to see the value Goodwill places on donations.  If you look at the valuation guide on their website, they provide a 'low' figure and a 'high' figure.  I always use the high figure as I feel that the items I donate are in much better condition than what I generally see for sale in a Goodwill store.

I never stop at $500.  The only significance of the $500 limit is that's when form 8283 is triggered.  I've filed form 8283 for as long as I can remember.  I'm usually in the $2K range when it's all said and done.

In my opinion, if I were to be audited, the worst that would happen is that the IRS may claim I over-valued my donations.  I would argue that I used the Goodwill provided valuations but we all know the IRS would win that argument and I believe I would simply have an amended return with lower charitable deductions resulting in a higher tax bill.  Seems like a no-brainer to me, but again, that's just my opinion.

I think it's important to understand that I actually do donate these items, I'm not just claiming a deduction where none exists, which is what I believe many people and professional tax preparers do when they use $500 for a deduction.

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InFlamed said:   I will say up front, I have little experience in "charitable donations" and will be donating my clothes regardless. I have too many that I have no use for, and I try to limit what I throw in the garbage. My question is, should I take it to a place that will give me a receipt? Is that even worth my time? I have about 30 articles of clothing to give. I file itemized deductions on my taxes. Thanks.
  
Context is important here:

From a monetary perspective, unless you are itemizing on your tax return every year there is no monetary benefit for you. You will receive nothing other than the satisfaction that your junk is being donated to be used by others.

From a moral perspective, I highly advocate for donating ACTUAL items such as food, clothing, items, etc.. instead of giving actual money. If you're giving something that can actually be utilized, it is very much likely to be used unless the donation company can't do anything with it... In which case, they will just throw it out like you would have. If you donate with a checkbook, it will simply be a part of the many "Non-Profit" organizations with six-figure CEO salaries. Hell, Good Will's CEO is one of those, but at least if you donate items to them or the salvation army you can at least say you support employing all the people that work at their locations, etc...

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InFlamed said:   I will say up front, I have little experience in "charitable donations" and will be donating my clothes regardless. I have too many that I have no use for, and I try to limit what I throw in the garbage. My question is, should I take it to a place that will give me a receipt? Is that even worth my time? I have about 30 articles of clothing to give. I file itemized deductions on my taxes. Thanks.
  
As the replies have told you, since you itemize your deductions, then yes, it's worth it rather than throwing it out, as you will owe less federal taxes.

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justignoredem said:   
InFlamed said:   I will say up front, I have little experience in "charitable donations" and will be donating my clothes regardless. I have too many that I have no use for, and I try to limit what I throw in the garbage. My question is, should I take it to a place that will give me a receipt? Is that even worth my time? I have about 30 articles of clothing to give. I file itemized deductions on my taxes. Thanks.
  
Context is important here:

From a monetary perspective, unless you are itemizing on your tax return every year there is no monetary benefit for you. You will receive nothing other than the satisfaction that your junk is being donated to be used by others.

From a moral perspective, I highly advocate for donating ACTUAL items such as food, clothing, items, etc.. instead of giving actual money. If you're giving something that can actually be utilized, it is very much likely to be used unless the donation company can't do anything with it... In which case, they will just throw it out like you would have. If you donate with a checkbook, it will simply be a part of the many "Non-Profit" organizations with six-figure CEO salaries. Hell, Good Will's CEO is one of those, but at least if you donate items to them or the salvation army you can at least say you support employing all the people that work at their locations, etc...

  
A legit local food bank (no 6-figure salaried employees) can do a whole lot more with $100 in cash than $100 worth of canned green beans.

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We usually donate much more than $500 of items to goodwill throughout the year. We just take picture of the items in case we ever get an audit trigger. I'll try to lay out 10-15 shirts so I don't have thousands of pictures.

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justignoredem said:   
If you donate with a checkbook, it will simply be a part of the many "Non-Profit" organizations with six-figure CEO salaries. Hell, Good Will's CEO is one of those,

  WHOA WHOA . STOP THE TRAIN. A huge national nonprofit's CEO getting paid six figures? GTFO!

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rufflesinc said:   
justignoredem said:   
If you donate with a checkbook, it will simply be a part of the many "Non-Profit" organizations with six-figure CEO salaries. Hell, Good Will's CEO is one of those,

  WHOA WHOA . STOP THE TRAIN. A huge national nonprofit's CEO getting paid six figures? GTFO!

  
Yeah yeah, nothing new, my point simply being that donating items is more direct - and given the current level of corruption of non-profits that are squeezing the bleeding hearts of people that like to think they are doing someone great and noble - are really often times contributing to "non-profits" that have 80%+ in "Administrative costs" with little to nothing actually going to the causes they claim to support. 

For example, breast cancer is FILLED with these.

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rufflesinc said:   
justignoredem said:   
If you donate with a checkbook, it will simply be a part of the many "Non-Profit" organizations with six-figure CEO salaries. Hell, Good Will's CEO is one of those,

  WHOA WHOA . STOP THE TRAIN. A huge national nonprofit's CEO getting paid six figures? GTFO!

  Usually, the CEO pay is seven figures.

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justignoredem said:   ...From a moral perspective, I highly advocate for donating ACTUAL items such as food, clothing, items, etc.. instead of giving actual money. If you're giving something that can actually be utilized, it is very much likely to be used unless the donation company can't do anything with it....
You do realize that most organizations that have the infrastructure to collect used items aren't actually putting those items to use in their charitable works, right?  The donated goods are sold to provide revenue for their operations.  The exceptions - food banks, toys for tots or a coat drive or something like that.      

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stanolshefski said:   
rufflesinc said:   
justignoredem said:   
If you donate with a checkbook, it will simply be a part of the many "Non-Profit" organizations with six-figure CEO salaries. Hell, Good Will's CEO is one of those,

  WHOA WHOA . STOP THE TRAIN. A huge national nonprofit's CEO getting paid six figures? GTFO!

  Usually, the CEO pay is seven figures.

  
It is not.

Not for 99.9% of charities.

 

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It's easy to say "Every charity is crooked," and use that as an excuse to be a miser.
Use CharityNavigator or similar sites to understand an individual charity's percentage of overhead and executive salaries.
There are lots of good charities doing good things out there.

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I tend to donate stuff because it's way more environmentally friendly than just throwing something in the trash... reusing stuff is good whenever you can.

From a strict financial perspective it probably makes no sense.

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ChinaRider said:   For what it's worth, I've been donating clothes and other household items to Goodwill and taking credit for it on my taxes for decades.  As a previous poster mentioned, it only matters if you itemize deductions.

I think most people would be shocked to see the value Goodwill places on donations.  If you look at the valuation guide on their website, they provide a 'low' figure and a 'high' figure.  I always use the high figure as I feel that the items I donate are in much better condition than what I generally see for sale in a Goodwill store.

I never stop at $500.  The only significance of the $500 limit is that's when form 8283 is triggered.  I've filed form 8283 for as long as I can remember.  I'm usually in the $2K range when it's all said and done.

In my opinion, if I were to be audited, the worst that would happen is that the IRS may claim I over-valued my donations.  I would argue that I used the Goodwill provided valuations but we all know the IRS would win that argument and I believe I would simply have an amended return with lower charitable deductions resulting in a higher tax bill.  Seems like a no-brainer to me, but again, that's just my opinion.

I think it's important to understand that I actually do donate these items, I'm not just claiming a deduction where none exists, which is what I believe many people and professional tax preparers do when they use $500 for a deduction.

  Ditto.   I deduct a few thousand a year in donations to charities via bags of clothing, etc.  Usually about 7-10 drops of multiple bags (usually 3-4) of clothing per year.   The max per donation is around $250 (without add'l documentation), so I usually add to the donated items until I get close to that amount.

  I have been doing this for a few decades also. 

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djohn said:   
ChinaRider said:   For what it's worth, I've been donating clothes and other household items to Goodwill and taking credit for it on my taxes for decades.  As a previous poster mentioned, it only matters if you itemize deductions.

I think most people would be shocked to see the value Goodwill places on donations.  If you look at the valuation guide on their website, they provide a 'low' figure and a 'high' figure.  I always use the high figure as I feel that the items I donate are in much better condition than what I generally see for sale in a Goodwill store.

I never stop at $500.  The only significance of the $500 limit is that's when form 8283 is triggered.  I've filed form 8283 for as long as I can remember.  I'm usually in the $2K range when it's all said and done.

In my opinion, if I were to be audited, the worst that would happen is that the IRS may claim I over-valued my donations.  I would argue that I used the Goodwill provided valuations but we all know the IRS would win that argument and I believe I would simply have an amended return with lower charitable deductions resulting in a higher tax bill.  Seems like a no-brainer to me, but again, that's just my opinion.

I think it's important to understand that I actually do donate these items, I'm not just claiming a deduction where none exists, which is what I believe many people and professional tax preparers do when they use $500 for a deduction.

  Ditto.   I deduct a few thousand a year in donations to charities via bags of clothing, etc.  Usually about 7-10 drops of multiple bags (usually 3-4) of clothing per year.   The max per donation is around $250 (without add'l documentation), so I usually add to the donated items until I get close to that amount.

  I have been doing this for a few decades also. 

  
i usually drop it few times a year on those metal drop boxes.  Obviously i don't get any receipt for those ... so for those .... can you claim multiple donations?   
I also donate furniture .. but those Salvation army picks up and gives me a receipt ... so those are bit easier.

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BostonOne said:   It's easy to say "Every charity is crooked," and use that as an excuse to be a miser.
Use CharityNavigator or similar sites to understand an individual charity's percentage of overhead and executive salaries.
There are lots of good charities doing good things out there.

 Do not use Charity Navigator, whose only criteria is administrative costs, a very poor measure. Use Give Well.  

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InFlamed said:   I will say up front, I have little experience in "charitable donations" and will be donating my clothes regardless. I have too many that I have no use for, and I try to limit what I throw in the garbage. My question is, should I take it to a place that will give me a receipt? Is that even worth my time? I have about 30 articles of clothing to give. I file itemized deductions on my taxes. Thanks.
  Some will pick up:

Amvets
DAv
Goodwill etc

The thrift store is the only place I go for clothes.

Thank you for your donation

rated:
If you're concerned about how your donations are being used (or if the CEO is making six figures) and you're involved in a local church/temple/other religious affiliation, ask around about small local organizations. We have one here called Angel's Attic. It's 100% volunteer-run. They pick up, provide a (blank) donation form, and the items all go to people who truly need it (for free).

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meade18 said:   
justignoredem said:   From a moral perspective, I highly advocate for donating ACTUAL items such as food, clothing, items, etc.. instead of giving actual money. If you're giving something that can actually be utilized, it is very much likely to be used unless the donation company can't do anything with it.
A legit local food bank (no 6-figure salaried employees) can do a whole lot more with $100 in cash than $100 worth of canned green beans.

No kidding! The local food bank stated that they can typically purchase 6X the product that you could ever accomplish at the grocery store. Many times there is food available for basically free, they only have to pay the shipping costs.
stanolshefski said:   Usually, the CEO pay is seven figures.
No, no it is not. As of 2015, there are only 15 that make >$1m. When you remove many that are on there solely for one-time bonuses, 3 of those drop off. 
Regardless, many of these execs are still likely taking a large paycut from what they could be making in the private sector. Yes it sucks that CEOs make 100 times what the low level employees make, but should non-profits insist on only paying out minimum wage and end up with substandard candidates?
vranaco said:   
 Do not use Charity Navigator, whose only criteria is administrative costs, a very poor measure. Use Give Well.


For those who don't take the time to read the link, here is why just looking at overhead is a poor measure. Imagine there is a huge disaster, where 2 different charities each raise $100m.

  • CharityA only spends 2% on overhead because they purchase everything from local businessmen who take care of everything, but pocket 50% in profit/price gouging
  • CharityB spends 15% on overhead, since they have their own people who coordinate shipments/purchases of goods

If we just use "administrative costs" then CharityA looks far better (2% vs 15%), even though CharityB actually delivered more goods per dollar donated (85% vs 49%).
 

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OP, if you do standard deduction, there's no benefit.
If you itemize, free money (compared to trash).

Also consider the American Kidney fund. If you're lazy like me, you can call them and they'll come pick up your donation and give you a receipt. Saves time hauling to donation center.

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Czechmeout said:   
vranaco said:   
 Do not use Charity Navigator, whose only criteria is administrative costs, a very poor measure. Use Give Well.


For those who don't take the time to read the link, here is why just looking at overhead is a poor measure. Imagine there is a huge disaster, where 2 different charities each raise $100m.

  • CharityA only spends 2% on overhead because they purchase everything from local businessmen who take care of everything, but pocket 50% in profit/price gouging
  • CharityB spends 15% on overhead, since they have their own people who coordinate shipments/purchases of goods

If we just use "administrative costs" then CharityA looks far better (2% vs 15%), even though CharityB actually delivered more goods per dollar donated (85% vs 49%).

I wouldn't go so far as to say overhead is a poor measure, more that it is an incomplete measure.
The point I was generally making was that lots of folks use "too much spent on overhead" as an excuse not to give at all.
The charities that I have been involved with have been extremely judicious with donor funds. Sure, there are bad apples out there, but people don't take lower pay & volunteer their time in order to rip people off. They really do believe in the mission of their cause most of the time.

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i ALWAYS donate to the NO KILL SHELTER .....the money's value goes more distance there.

Skipping 6 Messages...
rated:
Czechmeout said:   
meade18 said:   
justignoredem said:   From a moral perspective, I highly advocate for donating ACTUAL items such as food, clothing, items, etc.. instead of giving actual money. If you're giving something that can actually be utilized, it is very much likely to be used unless the donation company can't do anything with it.
A legit local food bank (no 6-figure salaried employees) can do a whole lot more with $100 in cash than $100 worth of canned green beans.

No kidding! The local food bank stated that they can typically purchase 6X the product that you could ever accomplish at the grocery store. Many times there is food available for basically free, they only have to pay the shipping costs.
stanolshefski said:   Usually, the CEO pay is seven figures.
No, no it is not. As of 2015, there are only 15 that make >$1m. When you remove many that are on there solely for one-time bonuses, 3 of those drop off. 
Regardless, many of these execs are still likely taking a large paycut from what they could be making in the private sector. Yes it sucks that CEOs make 100 times what the low level employees make, but should non-profits insist on only paying out minimum wage and end up with substandard candidates?
vranaco said:   
 Do not use Charity Navigator, whose only criteria is administrative costs, a very poor measure. Use Give Well.


For those who don't take the time to read the link, here is why just looking at overhead is a poor measure. Imagine there is a huge disaster, where 2 different charities each raise $100m.

  • CharityA only spends 2% on overhead because they purchase everything from local businessmen who take care of everything, but pocket 50% in profit/price gouging
  • CharityB spends 15% on overhead, since they have their own people who coordinate shipments/purchases of goods

If we just use "administrative costs" then CharityA looks far better (2% vs 15%), even though CharityB actually delivered more goods per dollar donated (85% vs 49%).

  YES! And it doesn't measure actual results. A local organization can spend 2% on overhead because all the employees are volunteers, but a national (breast cancer charity for instance) can actually fund major scientific advances. Take a local breast cancer charity that brings in $10,000/yr and pays nothing to employees, but because of that they have no full time employees and their chances of expanding to help a greater number of people are slim to none. They can set up a support group and provide assistance to individuals. The national organization that brings in $10M per year pays out $1.5M in salaries, but can then spend $6M on actually funding scientific research to find cures/treatments. Both are good causes, but just because the local organization's overhead is 0, doesn't make the organization any more moral.

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