The penny is on its way out. The Canadian government says it costs 1.5 cents to actually manufacture each penny, so they’re going to stop the production of them this fall.
The announcement was made as part of the recent federal budget, and Finance Minister Jim Flaherty suggested that Canadians donate their stockpile of pennies to charity. Apparently, the government has even said it will partner with charities to help them capitalize on the death of the copper coin.
In theory, it sounds like a good idea. Undoubtedly, there are thousands if not millions of dollars out there in piggy banks and coin-filled jars. Putting that money to use charitably would be fantastic – but think about the hours it will take for charities to collect coins, roll them, account for them and take’em to the bank. Then there’s the tax receipts they have to write for each donation. That’s quite the opportunity cost.
A penny fundraising campaign example
Let’s take a second to play out that opportunity cost. On the heels of this budget, a charity starts a fundraising campaign suggesting you give them your pennies; they’ll be collecting them all in a massive jar in at a local mall. So you take your piggybank to the mall and satisfyingly dump them in their collection jar. It feels good to be a part of it and contribute.
At the end of the day, the charity’s employees count and roll the pennies. They spend a few hours doing it. Your portion of the pot was $23. Not a bad amount considering it comes from just pennies. In total, they may raise about $1,000.
That $1,000 might be good for a day’s work. But consider the costs they spent on advertising the campaign, on the supplies, on their employees’ time for the day (even if staffed by volunteers), and any follow up (like writing tax receipts for the people who wanted their money counted separately and receipted).
A campaign like this can be great for awareness and raising some money, but chances are they spend more to put it on than they raise as a result of it. Awareness is worth something for sure, but every dollar spent on the fundraising campaign means it’s not going to the charity’s programs.
Use your pennies wisely
We’re not saying don’t give your pennies to charity. Do it – it’s a great way to spend them. We’re just saying consider the cost of receiving a donation when you give it – in pennies or otherwise. Or don’t penalize a charity that spends money on fundraising and administration when you support the types of charities that do these kinds of campaigns.
Want an alternative to literally giving your small change to a charity? Roll your own pennies (throw in some tubes of nickels, dimes and quarters while you’re at it) and send the equivalent to the charity of your choice through Chimp instead.
By saving charities time and money on processing penny-collection donations, it truly translates to a penny saved is a penny earned.