From excess goods to charitable treasures
Whenever Sandie McVey wraps up an out-of-town trade show visit for Hirsh Industries Inc., the office products that were on display become charitable donations.
“We do a lot of trade shows, and when we go to them it’s more difficult to pack up the products and send them home, so it’s easier to donate them to an organization,” McVey said.
For about the past five years, the Des Moines-based office products manufacturer has donated new filing cabinets, shelving and other goods it makes to Gifts In Kind International, which specializes in accepting corporate contributions and distributing them to charitable organizations both within the United States and internationally.
“Twenty years ago, companies really didn’t want to give away their products,” said Susan Corrigan, CEO (check title) of Gifts In Kind, “because there were so many organizations out there that needed donations (and no easy way to arrange it). Now, we provide that bridge. Also, companies that have done it are leading other organizations to consider it.”
In the past 20 years, Gifts In Kind has grown to become the third-largest non-profit organization in the United States. The Alexandria, Va.-based 501(c)3 corporation distributes $800 million in goods annually to more than 200,000 charitable organizations.
Besides providing an alternative means for companies to clear out excess inventory, in-kind donations also provide a tax deduction for the business. The best part, say company representatives, is knowing that they’re helping churches, hospitals, schools and other non-profit organizations.
According to the latest Conference Board survey, product donations accounted for more than 48 percent of all U.S. corporate giving last year, up from 35 percent in 2002. In comparison, giving from corporate foundations represented 27 percent of giving, and corporate contribution programs represented 24 percent.
EFFICIENT WAY TO DONATE
Jamie Ward, a tax partner with Denman & Co. LLP in West Des Moines and a member of several charitable boards, said she’s finding that companies are opting for in-kind contributions more often.
“I think that kind of giving is increasing as businesses become more aware of that avenue of giving,” she said. “I think in the past, businesses found it easier to destroy excess inventory. … But more and more, businesses are finding they want to help.”
Last year, Iowa companies donated nearly $1 million worth of products through Gifts In Kind, which is one of several national non-profit groups that act as hubs for equitably distributing product donations to charitable organizations. Other organizations active in receiving and distributing donated goods in Iowa include the National Association for the Exchange of Industrial Resources (NAEIR), based in Galesburg, Ill., and World Vision Gifts In Kind of Tempe, Ariz.
“This is a very efficient way to donate products, because we know that the recipients have been qualified by Gifts In Kind International,” said Lynne Dragomier, senior director of corporate communications for the Maytag Corp., which has donated appliances and vacuum cleaners through Gifts In Kind for about the past five years. “We know that it is a legitimate need and request. Also, the organization handles the logistics, so that’s a great advantage.”
Bob Carpenter, president of Carpenter Uniform & Promotions in Des Moines, said NAIER provides a good outlet for small quantities of discontinued uniform and clothing items he needs to liquidate.
“We find that working with NAIER is an easy way to get it out of our warehouse and have it do some good, rather than trying to sell it at flea market prices,” he said. “The tax benefits pretty much make it advantageous to use NAIER rather than to try to recoup some of the monetary value out of it.”
In-kind donations are also becoming more popular with retailers, Corrigan said. A number of retail companies with stores in Iowa, including Bed, Bath & Beyond, Williams-Sonoma and The Talbots Inc., donate goods through Gifts In Kind. And Davenport-based Von Maur gives directly from its distribution centers on a quarterly basis, she said.
NOT TOO GOOD TO BE TRUE
On the receiving end of in-kind contributions, Broadlawns Medical Center is preparing to renew its first-year membership with NAIER.
“We still think it’s too good to be true, because the items are in their original packaging,” said Joni Swartz, the hospital’s director of general services. “(They are) items like 3M Post-It Notes, Stanley tools and other familiar names. It’s perfectly good merchandise in its original packaging.”
The hospital is among a number of non-profit organizations in Greater Des Moines that are members of an in-kind products clearinghouse. Member organizations must agree to use the merchandise received only for the care of the ill, needy or minors, according to federal tax rules, and cannot barter, trade or sell it. The merchandise can be given directly to the qualifying individuals an organization serves or used in the administration of the organization.
Broadlawns has ordered items such as maintenance and cleaning supplies, clothing items to distribute to homeless patients and Christmas decorations through NAIER’s product catalogs. Swartz estimates the hospital in the past year has received about $6 in goods for every dollar it paid in membership and shipping and handling charges. NAIER’s annual membership fee to non-profit organizations is $575.
Because items are shipped to non-profits on a first-come, first-served basis, “the only drawback is if we’re not quick enough and don’t receive what we asked for,” she said.
Henry Franken, co-director of Vatterott College in Des Moines, introduced the college to NAIER about four years ago, having used it for about 10 years as a public school administrator in Prescott and Sac City.
Over the years, Franken has coordinated the donations of toys to schools, conducted a Secret Santa operation, donated building supplies to Habitat for Humanity, and has helped some of Vatterott’s needy students and their children, he said. He regularly drives to the organization’s warehouse in Galesburg to pick out items from its “grab bag,” he said.
Franken said he’s found the quantity of items available through the organization seems to be smaller than in years past, and that he’s reevaluating the college’s membership with NAIER.
“I think with all these dollar stores and eBay, the stores are selling these items that are returns rather than donating,” he said.
That’s not the case, said Emily Collins, a NAIER spokeswoman, who said the average value of items received nationally by its members is approximately $19,000.
“We recommend to the members to just request as much as possible and they’re more likely to receive items,” she said. “If you’re in a college situation, every department needs to see a catalog, and make your list as long as you can, and that’s going to make your allocation better.”