Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 17
nies on the dollar, you can donate it and
recoup twice your cost.
MAKING DONATIONS A SNAP
with a gifts-in-kind organization, you
should be able to donate merchandise
at any time, whether transitioning between seasons, updating inventory or
consolidating your warehouse. And size
doesn't matter. Most groups will accept
anything from a simple box full of products to truckloads.
GIVING MAKES A DIFFERENCE
It's clear that Section 170(e)(3) will benefit your corporation. But the added bonus is that it allows you to help others in
the process. Those items taking up space
in your warehouse could be just what a
charity needs to help others.
Most anything your company produces can fill a need through a charity. The
most commonly requested items include office supplies, maintenance items
and janitorial products. And there's always a need for clothing, toys, sporting
goods and small appliances. Some items
help keep charities' offices working,
while others directly benefit the communities they serve.
When using a gifts-in-kind organization, you should know exactly who your
products are benefiting. Most gifts-inkind organizations will tell companies
what charities received its donations.
You can then share that information
with your employees, building morale by
demonstrating that they are part of a caring, giving company.
Excess inventory doesn't have to be
a problem. Donate it and see the benefits not only on your next corporate tax
return but in the lives of people who are
truly in need. q
The next question is how to get that surplus merchandise off your shelves and
into the hands of people who can really
use it. That's where gifts-in-kind organizations come in.
Gifts-in-kind organizations are 501(c)
(3) nonprofits that exist to collect corporate product donations and then distribute them to qualified nonprofits.
The organizations act as the go-between
for member companies and charities in
need. You cover the costs of shipping your
products to a gifts-in-kind organization,
and they take care of the rest. The organization screens nonprofits to make sure
they're qualified, handles the logistics of
getting stock from point A to point B, and
provides all the tax documentation.
Besides the obvious advantage in
earnings, making gifts-in-kind donations also save time. Discounting, liquidating and auctioning old merchandise
are all labor-intensive practices. Donating can be, too, if you're choosing charities on your own. But when you join a
gifts-in-kind organization, the process
of getting rid of surplus inventory is simple and fast.
Donating items also helps protect the
integrity of your brand and gives you more
control over where your products end up.
That's because the tax code stipulates that
a donated product cannot be resold, bartered or traded - and it must be used according to the organization's mission.
Once you establish a relationship
Gary C. Smith is the president of National
Association for the Exchange of Industrial
Resource (NAEIR), the largest gifts-in-kind
organization in the U.S. Since its founding in
1977, the Galesburg, Illinois-based NAEIR
has received donations of excess inventory
from more than 8,000 U.S. corporations and
redistributed more than $3 billion in products
to non-profits and schools. Contact NAEIR at
800.562.0955 or visit www.naeir.org.
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