Add-on fees and tipping is everywhere in travel, especially hotels. And it’s not just resort and destination fees, either.
You may be asked to tip the website where you made your reservation or the ownership group of the hotel in addition to a mandatory add-on for property taxes disguised as benefiting the environment. And that’s on top of being asked to tip housekeeping because the hotel owners refuse to pay a living wage (and these tips make the lower wages sustainable, propagating that system).
But there are also add-on fees some hotels charge, but that you can ask to have removed. London hotels often have an ‘optional’ 5% service fee you can ask to have removed but very few know they don’t have to pay it.
Meanwhile other hotels will add on a charitable donation to the cause of their choice. Marriott partners with UNICEF in the Caribbean, Latin America, Europe, Middle East, Africa and Asia-Pacific in a program where hotels can add donations to guest folios on an opt-out basis. Generally $1 is added per night automatically, but guests can tell the front desk to remove the charge.
Autopilot opt out is the opposite of thoughtful philanthropy, so I was sympathetic to a reader who complained about feeling shamed by hotels that do this, and he objects to UNICEF as anti-Israel.
If a program is voluntary, ok, but creating an opt-out that creates a shaming situation when you have to expressly ask to have the donation removed is sure awkward. Your donation does very little good, but you’re forced to signal you’re cheap and don’t care for others. That’s bad business and bad charity. And aren’t the most admirable gifts anonymous anyway? (Cf. Maimonides’ Eight Levels of Charity).
What do you want to get from your philanthropy? I think it helps to be clear about your goal in giving. Often people make donations not because they want to do the most good at the margin but to,
- feel good
- tell yourself you’re doing good
- get recognition (from the charity or from peers)
- signal agreement with the cause you’re donating to
And none of these are well-served by making small donations via a third party business, doubly so because you do not know whether the total amount collected is actually given to the charity exactly or whether the business is giving the same amount to the charity they would whether $1 is added to your bill or not.
You can do a lot more for the world with a focused approach, and $1 at a time makes very little individual difference. If you itemize your tax deductions, your donations are (generally) deductible to a qualified non-profit, and you can give more for the same net out of pocket.
Most of us see a cause, send some money, feel good about it – and call it done. But what if we actually want to believe that the organization we’re helping is making a difference, and our gift specifically matters? Here are a few ideas.
- Focus your giving. A lot of small gifts won’t be as helpful. Plus the re-solicitation cost by charities is high. When you make a small gift you’re really just telling most charities “spend money to get me to give again (and again).” Many charities will spend as much or more than you give them trying to get your renewal, which is profitable overall because of the percentage that do renew and upgrade their support. Bigger gifts see less eaten away by re-solicitation expense.
- You should probably give more than you do. Pick a percentage of your income and stick to it. Tell other people about it, and the specific cause that you’re supporting, as a commitment mechanism.
- Giving appreciated assets is better than cash. If you have appreciated stock, give that instead, you get the tax deduction for the current value of the shares and get to avoid paying capital gains taxes on their appreciated value. That’s true for nearly all assets that have grown in value. And that means you’re better able to afford to give more.
- Give to a cause that engages you, and a charity that continues to engage you, because the most good will likely be done through your lifetime giving than a one off. It’s not the $100 that necessarily makes a difference, but the $100 multiplied out across years and perhaps when you consider leaving a portion of your estate (one of the ways that lower dollar solicitation programs pay out for charities over time, frequent donors may then remember the charity in their will).
- Traditional metrics of efficiency are used wrong. Unless most money is being spent on overhead don’t directly compare overhead metrics – many charities game these anyway (what is a fundraising vs program cost is easy to play with) and deficits aren’t always signs of financial irresponsibility. Bonus points for putting their tax returns on their website?
Maybe… but those are all publicly available online eg at Guidestar anyway. Deficits, transparency scores, are overhead percentages are used because they’re easier than actually figuring out whether an organization makes a difference or not, and it’s tough for small donors to invest enough in learning that for themselves.
- Pick unpopular causes, they are probably getting insufficient investment versus following the crowd. Causes everyone else is giving to probably have too much relative to other causes, and relative to their marginal opportunities to make a difference.
- Pick a person, not a cause. This isn’t a popular way to do philanthropy, and it won’t get you a tax deduction. But if you’re a traveler, and you don’t have big money to materially affect the direction of a charitable institution, perhaps you can achieve something of scale – with an individual you met along the way? A few hundred dollars may not matter to a mega-charity (though they won’t admit it) but it could help your tour guide in Africa or South Asia to fix the vehicle they use to earn a living, or maybe it would help them send their daughter to school?
If you are very wealthy some of these thoughts don’t apply. You don’t need to focus your giving to make a difference, for instance, because you can make several large gifts and take more of a portfolio approach (hoping that there are enough successes to balance out the failures).
Back to hotels, it’s fine to place QR codes and signs encouraging donations. If you want to be really aggressive, and do it on an opt-out basis, allow guests to remove the charges themselves through the chain’s mobile app. Extracting money from people who allow it because it’s a drip amount, or who are too embarrassed to question it, is a poor way to do charity.
This scam has been an issue at Mexican resorts for a decade. Collections largely go to resort management bonuses. American business morals are becoming more corrupt every year as we devolve into a 3rd world country.
I most situation in which you say “NO” are situations you feel you are being encumbered upon or taken advantage of.
It’s OK to say NO!!
And British Airways needs to take the mandatory begging announcement for indian kids at the end of every flight and shove it up their a$$.
As a matter of principle I always get those charges removed. But it’s much more difficult in a restaurant when you’re dining with friends or colleagues and it can be socially very awkward.
– I always ask to remove the charity charges from hotel bills when traveling on business because it is too much trouble for our accountants to remove those from reimbursements.
Even if the collection is legit and 100% goes to the charity, corporations still win as the donation is on their books as a perhaps large corporate tax deduction. They “do good” without touching the bottom line, and they get paid for it.
Yeah so that they can donate the money raised for a nice tax break…
I recently heard that the businesses that collect all this money get hefty tax write offs because the money donated is considered as coming from them. That certainly seems plausible and if so that’s another reason to opt out.
I might donate a dollar at a fast food restaurant in exchange for a coupon, but otherwise I always opt out of these kinds of donations.
Personally, I donate to animal rescue charities, but I research their spending, via their IRS 990 forms, to see how much money goes to the actual animals rather than overhead and salary before making any donations.
Gary, you wrote an excellent and thoughtful summary about this awful practice of charity shaming.
Thank you for including the links about UNICEF’s anti-semitism and the Southpark clip.
There’s no regulations against this. A shame, as nothing else will ever fix it — why would a business stop something that works! (for them)? Certainly not a few blogs or articles on newspaper (didn’t do anything about resort fees, only attorney general’s got Marriott to change their drip practice)
If a business writes off the charitable contributions without reporting the contributions as income, that’s tax fraud. There might be a whistleblower reward for an insider reporting it
Like others here – I don’t give “charity” money to large corps so they can turn around and say they gave X without actually giving anything since it all came from customers.
What @Bob said.
Why should I make a donation so a corporation can get a deduction?
Wand me to donate? You first…
Have the CEO donate their salary to charity.
I’ll wait.
Thanks for covering this AGAIN. I don’t see what the problem is. Just don’t donate, tip or pay the fees.
“Generally $1 is added per night automatically, but guests can tell the front desk to remove the charge.”
You can’t see what the problems is? A wait in line, stop at the desk, an awkward conversation over a few hundred pennies, a reprint of the receipt, extra steps for the accounting staff for reimbursement, etc. Watch the South Park video above, brillant
If a hotel tries this on me, anyone within range of a trained public speaker voice will hear why I never, under any circumstances, allow a corporation to donate on my behalf.
Namely, it’s inefficient, gives tax benefits to the company not you, and might not be a charity I would normally support. I don’t have an issue with UNICEF, but they’re not my first choice…I prefer to support local charities.
One of the things I realized during COVID is that using the self checkout at the supermarket means I don’t have to listen to the spiel trying to get me to donate to that month’s charity…
(Oh, and the most inefficient way to give to charity: Food drives. Food banks don’t want peanut butter. They want money. They can buy lots more peanut butter with $5 than you can).
“Shaming” … really? You feel shamed by a front desk agent about noticing that the hotel trying to cheat you? People who feel shamed by standing up for themselves are just plain sad. Hotels can’t plop fees on your bill and hope you don’t notice. That’s called cheating, and ending is it smart, not shameful. Why would any traveller anywhere care what a front desk agent thinks? Let’s get real, guys. Develop a backbone and stand up for what’s right.
While I fully agree w hotels needing to pay living wages, I don’t think you realize the impact of adding $1 per guest. It is precisely small change for the individual, but the joint power of the millions of guests Marriott receives annually translates into real impact for UNICEF. Do you really need to look at their 990 for $1? Besides everyone actually knows about UNICEF unless they live in a whole. I think you mix far too many points in your article that actually aren’t related. If folks have issue w other aspects of fees… great I get it. But the donation is impactful.