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It's common to see companies say that "all proceeds" from selling something, or from admission, will go to charity. What's not clear to me is whether that's

  • all the revenue, or all of the pre-tax price and they're just saying proceeds to be clear they're not donating the sales tax
  • all the profit, after allowing for -- well, what? cost of materials? cost of materials plus time of the staff who sell it to you and rent for the building they do it in? All that plus corporate overhead and franchise fees?
  • pretty much any number between zero and the price, whatever the company feels like

Is there a legal meaning? If Tim Hortons sells a million smile cookies for a dollar each are they obliged to donate a million dollars? I note their 7-year old web page has a * on it that doesn't lead anywhere, and I can't find the fine print:

WHEN YOU PURCHASE A SMILE COOKIE AT PARTICIPATING TIM HORTONS LOCATIONS, your full $1* goes to help support local charities like hospitals, food banks and children’s programs.

And if it happens that Tim's donates the whole price-before-taxes, is that because that's the meaning of proceeds, or just what they are choosing to do? Do false advertising laws impose a meaning for this phrasing?

Kate Gregory
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It has two meanings

There are gross proceeds which is all the income that the sale of the item realised, and there are net proceeds which is the gross proceeds less the direct costs of selling that particular item. Direct costs would typically include the cost of the item, sales or value added taxes, shipping costs etc. but not corporate overheads.

Assuming that Canada has laws against deceptive and misleading conduct, it is almost certainly the first of these that is meant. However, it would be better if they used a different word.

Dale M
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