Nashville Electric Service Donates To Charity With Customers' Money, But Not Their Permission

Nashville Electric Service (NES) decided it would be a good idea to round up each customer’s bill to the nearest dollar, then take that extra change to donate to charity. It’s a great idea, and since the total amount donated per year can’t exceed $11.88, it’s not a hardship on most people. But there are a few problems. First, NES chooses the charities, if that matters to you. What’s more troublesome is that NES plans to opt-in every customer when the program begins on January 2009 without asking for explicit permission—if you pay your electricity bill through NES, you’ll donate to their charities next year, thank you very much.

We know running a regular enrollment would be a lot more expensive and generate a much smaller pool of participants, but it’s really the only way to collect donations. Is it even a donation if it’s taken from you without your permission first?

Sharon tipped us to the scheme:

[On] Oct 1, [NES] raised all of our rates 20%, but I guess they didn’t think that was good enough. In a bill I opened up today at work, there was a little piece of paper inside with information on it about a new program they have called *change for charity*. Normally I take the bill out and throw away all that other stuff cuz I figure if there is something I SHOULD know, it would be on the bill, but I guess I am gonna have to start reading everything in there now.

This new program is where they take money and donate it to charities of their choosing which is all fine and dandy BUT it’s our money and we weren’t even asked if we want to contribute.

Personally, I will donate to who I want to donate to and that is the part that gets me—had I not read that [bill insert] like probably most people don’t, I wouldn’t have known about this.

If you don’t want to participate, click here to find an online form and phone number.

“Change for Charity” [NES] (Thanks to Sharon, David, and Eric!)
(Photo: Getty Images)

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  1. Oface says:

    Ah Nashville. So proud you’ve made it to consumerist AGAIN.

  2. BusyBusyBusyBusySleep says:

    Dominion Power does a similar thing, not quite as skeevy (or maybe more skeevy?):

    If you overpay your bill, they take the remainder and add it to some fund, to help people who can’t pay /their/ electricity bill.

    The end result being that they get the money (as it’s their fund), and you lose a couple bucks if you misprint your check (as they obviously don’t hold your balance over to the next month, if they send it to their in-house fund…)

    Yes, it’s easier to not misprint the check, but that’s definitely the first time I’ve seen it do anything but create a positive credit going into the next billing cycle.

    • Tank says:

      @BusyBusyBusyBusySleep: that’s more skeevy. if for some crazy reason i send a bigger payment than i needed to, i want it for my next month’s bill, not someone else’s bill.

    • balthisar says:

      @BusyBusyBusyBusySleep: What? I routinely overpay most of my utility bills, mostly because they keep going down, and I don’t always look to check the current payment amount.

      (Don’t get jealous, I’ve spent more than the savings [so far] on energy use improvements.)

      • lilacorchid says:

        @BusyBusyBusyBusySleep: Our utility does something like this too, but it’s administered by someone else, voluntary, and the corporation matches your donation. I think it’s a great idea as long as you know what you are in for.

    • Gokuhouse says:

      @BusyBusyBusyBusySleep: I sometimes overpay on purpose because I just like my checks to be even I am a little weird about that….but since water is the only bill I pay with a check it is easy for me to see the check and amount. Sometimes I pay 2 months in advance just because it is a bill I can easily overlook since it is the only one I pay with a check. If I found out that 25 dollars went toward a charity instead of my next months bill I would be extremely angry.

    • TVGenius says:

      @BusyBusyBusyBusySleep: Yeah, this is what I thought of when I first read it. Give us extra money so we can ‘give’ it to others, so they can pay us instead of freezing to death this winter.

    • RedwoodFlyer says:

      @BusyBusyBusyBusySleep:

      Heck, once I double payed without realizing, and wondered why my bill was nearly doubling every few months..turns out I missed the negative sign! Ended up getting a check for $500+ from Dominion (in VA) but had to pull teeth because they did the siphon thing.

  3. meechybee says:

    Does NES get to declare the tax deduction on their corporate income tax? If not, they would have to send everyone who contributed a a statement of their contributions, no?

    Is there a CPA in the house?

  4. Canino says:

    My electric co-op decided to do this a couple of years ago. It wasn’t a problem to opt-out, but I don’t see how they can just decide to bill you more unless you say no. Many people do things like automatic payments and they might easily miss the notice. I barely look at my bills that are auto-debited.

    • P_Smith says:

      @Canino: My electric co-op decided to do this a couple of years ago. It wasn’t a problem to opt-out, but I don’t see how they can just decide to bill you more unless you say no.

      People should never have to “opt out” in the first place. Taking money from the customers’ change is theft when it’s done without permission.

      Put it this way: Should you as a parent have to “opt out” of your son/daughter borrowing the car keys? That if he/she can get out of the driveway before you notice, that makes it alright? No, it doesn’t.

  5. So the max the company can donate is $11.88? Can’t some manager just throw a twenty in for the company and not worry about rounding up all of these bills?

  6. Craysh says:

    Sounds like the Democrats to me.

    Honestly, if they really wanted to be good people about this, they’d take the change you pay (say if your bill was 23.83 they’d take the .83) and donate THAT to charity.

  7. annelise13 says:

    We’ve got a similar scheme going on with one of our utilities (water, in this case). With us they add a dollar to the total at the top of the page, and then somewhere in the middle you can see your “real” total and then the dollar added to it. The fine print tells you this is optional, and if you don’t want to “donate” just send in a dollar less than the big total up at the top. My friends and I all wonder, how many customers have never even noticed, and even if they have who can’t can’t help but worry that somehow paying a dollar less than your total is going to come back and haunt you?

    It’s just sneaky. And charity by sneakiness just doesn’t seem…charitable.

  8. digitalgimpus says:

    My only issue here is the company taking the tax deduction that really the customers should get, since they earned it.

    That said… I’ve used companies that donate 10% to charity before, it’s a cool idea.

    But by choice, not by opt-out.

    IMHO I find the tax maneuver of taking advantage here to be very questionable ethically.

  9. Daemonstar says:

    Our city just started adding a $1 “donation” to our city bill for a new “aquatic center” they’re wanting to build (and have moved the possible location 3 times, now). We have to call to have it removed, which is easy enough, but it would have been a lot nicer if they had asked instead of opting me in for their “donation”, but, as is pointed out, I doubt they would get as much money that way.

  10. RStewie says:

    Alabama Power has an option to “donate” $5 to your bill, that goes to old people to help them pay THEIR bill.

    Which I guess is kind of messed up, since really, it all goes to them. And you can’t deduct it on your taxes.

    But whatevs. It’s optional, too, and they don’t get all sneaky with it.

  11. pecan 3.14159265 says:

    My power company’s been adding a blank to donate $1 to a vague group, like “(redacted) County’s firefighters’ charity,” which doesn’t lead me to want to donate any money to them, because I don’t know if it’ll actually go to a charity. It’s entirely optional, but I think it would help people donate if they provided a little bit of information, like a web address, so people can look it up for themselves.

    • Zulujines says:

      @IHaveAFreezeRay: It doesn’t make me want to donate to charity because I think it’s inappropriate. It usually is, as you say, vague or irrelevant to the business at hand, and that’s what I dislike. People are aware that charities exist and I imagine they donate to them if they feel like it. I just don’t like when they shoehorn the request in in somewhere else, like on your power bill, or when you’re buying groceries. It’s like panhandling.

  12. magic8ball says:

    Clearly it’s not OK for the power company to do this, but I’m curious about some details – will it indicate the REAL total anywhere on the bill? What will happen if the customer doesn’t pay the extra $0.53 or whatever? Will the company be making their extorted charitable donations part of a PR campaign (last year we gave $XXX to charity!)? Will the company be getting some kind of tax break for the donation?

  13. MyPetFly says:

    Seems a bit criminal to me…

  14. BytheSea says:

    WTF. Yes, it’s a problem when a multimilliondollar corporation picks the “charity” they force their users to “donate” to. Esp if by “charity” they mean their personal political lobby and by “donate” they mean “embezzel.”

  15. Julia789 says:

    Those vague charities are troubling. You don’t know if it’s a religious charity and your dollars will be spent on preaching something you don’t believe in, or if it’s a shady 3rd party charity collector who keeps 80 cents on the dollar for himself.

    I prefer the method some others have mentioned, where there is a blank to opt IN on your bill.

    Recently my kid’s elementary school started “opt out” fundraising. I saw the fundraiser form in his school folder, thought “I’ve already donated enough, I just spent $100 at the book fair.” and tossed it. I did not know it was a new “opt out” form saying if I did not sign the form I would be enrolled automatically. I found myself OBLIGATED to purchase and/or sell fundraising items. What the heck? It was a nightmare to get removed from the program.

    The public school gave all my personal information to the fundraising company without asking me. They should move this back to the old “opt IN” program. Honestly, I’d rather write the school a check than pimp my kid out to sell christmas ornaments or wrapping paper for the school.

    • humphrmi says:

      @Julia789: Those school “sell your friends our crap” fundraisers are insidious. We always participated when our first son started school. Then the products get crappier and crappier every year and the prices keep going up. Finally one year the PTA apparently decided that they were too tired to stay at the school until 5 or 6 PM on “crap pickup day”, and made one of us take a day off work to pick it up during school hours. That was the last year we did that.

      Oh well, back on topic. What I really wanted to say about this is, I am especially ungenerous about any charity or donation collection scheme that doesn’t disclose the charities, their tax status, and give me the opportunity to review their financials to ensure that they are properly managed. Its surprising when you look into the actual charities that the big donation collectors (like United Way) disperse funds to… you think you’re doing your due diligence because you’ve checked out the donation collector and ensured that their cost ratio is acceptable, but then they turn around and give a portion of your money to one of their “pet charities” that squanders and wastes money.

      No thanks, I donate directly to end charities (the groups that actually provide the services to the needy) now, and anyone else who wants to “collect” donations from me can pound sand.

      • Julia789 says:

        @humphrmi: Amen to that. Honestly if the school needs $20 or $50 from my family, just ask me and I’ll write the check instead of spending weeks of my time selling hundreds of dollars of crap no one wants so they can make the same $20 or $50. We should have the option.

        I agree 100% on the charities. Know where your money is going! Some groups sound nice, but when you dig deeper they have a hidden agenda that can be very scary, wasteful, or a front to earn cash.

  16. Mollyg says:

    I am surprised that this practice is legal. I smell a class action suit.

  17. I believe that I am listed as the charity to which the payments are made.

    Ooops, I am not? Shucks, darn.

  18. SunnyLea says:

    Oh, thank for this! I’m gonna spread the word.

    I donate plenty and might be glad to donate to this but I would prefer that it be opt-in and that the charities be disclosed.

  19. SonalMarcus says:

    As far as the tax deduction goes: Nashville Electric Service is a public utility, and I don’t think they would be able to take a deduction. NES/Electric Power Board goes back to TVA and the New Deal. Our power rates are pretty cheap in Nashville as a result, though the 20% hike is tough to swallow.

    But I’m not a fan of compulsory giving, or default opt-ins, and accordingly I’m opting out. Nashville’s politics are, with the exception of some council districts on the suburban periphery, pretty liberal. Unfortunately that brings some bad with what I consider good. The mayor’s a nice guy, but has a rich liberal’s cluelessness when it comes to initiatives like this. For a lot of people in my neighborhood (Maxwell in East Nashville), particularly older folks on Social Security, $11.88 represents five day’s worth of food.

    Well-intentioned, dumb idea. I wish we liberals could be done with this sort of thing.

  20. vastrightwing says:

    Consider that the utility may be getting a cut of the “donations”. Just my cynical side. You know, to pay for the administrative costs.

    Seriously, I loved the CFL (aka $12 light bulbs) program some other utility had. That was totally awesome!

  21. UnityCretan says:

    At least they told me in November that they are removing the $3.95 surcharge for paying online!

  22. Rectilinear Propagation says:

    Very scummy. Five bucks says that the charity is bogus. Any decent charity would want people to know what’s up.

  23. chichi9 says:

    I don’t know… I pay an NES bill every month, and honestly this doesn’t really upset me very much. Although I’m sure I threw away the notification in the bill, they always include so much junk I throw most of it away.

  24. thesadtomato says:

    Over here in Chattanooga, the Electric Power board sells 150-kilowatt-hour blocks of “green power.” It costs $4 a block and basically pays to generate energy from alternative sources. Wouldn’t mind them taking the difference on my bill and improving the kind of energy we use; logically, extra green energy would make power cheaper overall. Especially since they just raised our rate 17%.