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Changes Make CHIP Tax-Deductible for Co-op Shoppers

Recently there were two important developments with Community Shares of Wisconsin (CSW) and CHIP. First, CHIP and Willy Street Co-op officially formalized our 34-year relationship with a written contract. Second, the boards of both CSW and CHIP voted to merge the organizations effective December 31st, 2012. CHIP is now a program of CSW. Since 1971 CHIP was its own nonprofit organization. CSW formed in 1974 and the two organizations have always been closely aligned working to promote social change in our community.

What’s the meaning of these changes? As of 2013, there is the opportunity for CHIP contributions to be tax deductible for the benefit of Co-op Owners. We know that this has been something many of you Co-op Owners have wanted to see in place, and we’re glad we could finally make it happen!

As Co-op Owners, my colleagues and I at CSW/CHIP know about the Co-op’s “You Own It” program, where you can make requests you’d like to see at the Co-op. Think of this as a way that the Co-op staff worked with us to bring you this change—to allow you to “Own It.”

Some CHIP History
Our CSW/CHIP archives show that the Co-op’s Board agreed on March 27th, 1978, to offer Community CHIP at the register. The following year, our total CHIP revenue (from all CHIP sites, not just the Willy Street Co-op) was about $5,000. Those were the days when volunteers rode bikes from site to site, collecting $10 in CHIP funds at one store and $15 at another. Today however, CHIP donations have become a critical source of revenue for CSW/CHIP and our member groups.

For many years the Community CHIP was offered at a number of locations throughout Madison. In addition to grocery co-ops and grocery stores, other businesses that were CHIP sites long ago were bike shops, a fabric co-op, a UW movie co-op, and Green Lantern Eating Co-op, which was a Madison mainstay for many decades.

CSW/CHIP always felt a special rapport with co-ops like the Willy Street Co-op, which has now become our only CHIP site. Our philosophy is similar to that of a co-op: the nonprofits we raise money for all hold a seat on our board (yes, we have big board meetings!). And, in a sense, our member nonprofits “own” CSW/CHIP like you Owners own Willy Street Co-op.

Willy Street Co-op as the Sole CHIP Site
For at least the past 20 years Willy Street Co-op was the CHIP site most dedicated to helping us raise funds—by being willing to ask their Owners to CHIP. And all of you Co-op Owners who have said yes to CHIP over the years were equally dedicated—and generous. That’s why, in 2007, CSW/CHIP decided to work exclusively with the Co-op.

Two years ago, you and your fellow Willy Street Co-op Owners raised $180,000 for CHIP, and last year you $221,403! On behalf of CSW and all of our groups, we’re very grateful. Looking at Co-op Owners’ contributions historically, we estimate that donations from this one Co-op over the years have provided approximately $1.3 million to CSW/CHIP.

What Difference Will Tax Deductibility Make?
For many of you, CHIP donations may offer only a small savings on your taxes. For example:

  • Each week: Trish spends $100 on groceries and each time says yes to CHIP at 1%, or $1.

  • Each year: Trish has given a total of $52 to CHIP.

  • In her tax return: Trish’s income is $40,000, so her approximate tax rate (after exemption and standard deduction) is 15%, meaning that she would be able to deduct $7.80 (15% of $52) on her tax return.

Some people might decide that a small tax savings may not be worth taking the time to save their receipts and take advantage of tax deductibility. Even if that’s true for you, know that your donations make an big difference to CSW/CHIP and all of our groups. All of your small gifts add up to one tremendous gift for our community.
If you do plan to take a tax deduction for CHIP, remember to save your receipts.

Benefiting the Entire Community
Over the years we have seen the circular benefits of our partnership: the Co-op’s promotion of CHIP gives visibility to CSW/CHIP, and our promotion of CHIP gives visibility to the Co-op. (For instance, we encourage people to both shop and CHIP at the Co-op.)

We also share similar visions for our community. CSW/CHIP staff and board value this long-term relationship that has allowed us, together, to raise needed funds for grassroots nonprofits in our community. These nonprofits, of course, strengthen our entire community.

We also think of the Co-op as a valued partner whose support has helped CSW/CHIP. That partnership has also helped us advance our mission to: (1) provide support for our member nonprofits, (2) increase awareness of our members, and (3) increase community engagement with our members.

Our partnership between the Co-op and CSW/CHIP has changed over the years, and it will likely continue to evolve. What won’t change: we’re very grateful to all the shoppers who say “yes” to CHIP.

Next year, Co-op Owners may also request a report that summarizes CHIP donations over a 12-month period for their 2013 taxes.

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