Over $2 million in donated goods in one year to one ministry might make you think, that is one lucky ministry. The truth is, it’s a number that religious groups can potentially replicate themselves. And the effort it takes involves little more than flipping through a few catalog pages or browsing a web site.
Those web sites and catalogs feature new merchandise from United States corporations donated to gifts-in-kind organizations. These organizations redistribute products to not-for-profit members, including churches and schools, for free. The gifts-in-kind organizations act as a go-between that enables companies to receive a tax credit for donating merchandise while benefiting those in need.
Nelson Randolph discovered the benefits of a gifts-in-kind organization over ten years ago. Randolph serves on the staff of the Mission Board for Cedar Crest Bible Fellowship Church in Allentown, Pennsylvania. Through a gifts-in-kind organization, his church has received office and school supplies, clothing, tools, health and beauty items, toys and other products that it mainly sends overseas to benefit children around the world.
“If the gifts-in-kind organization went away,” Randolph says, “our ministry would be severely impacted.”
Randolph estimates that last year his church received over $2 million worth of merchandise that he ordered through the organization’s catalogs and web site.
Gifts-in-kind organizations receive donations from large companies. In turn, churches, schools and nonprofits pay a small annual membership fee and the cost of shipping and handling for any products they request from the gifts-in-kind organization’s catalog of items. There is no limit on the number of items a member can request throughout the year.
What motivates companies to donate to gifts-in-kind organizations? It may be to reduce storage costs, clear up space in their warehouse, keep unsold merchandise out of landfills or fulfill their philanthropic missions to give back to their communities. It’s also a way for companies to streamline their donation process. They can receive a tax deduction for donated items without having to tie up their own employees’ time searching for worthy groups or shipping items to multiple locations.
Pastor James Mohler of Faith Baptist Church said that his church’s location just off the highway in Spokane, Missouri, leads to people often stopping in looking for help. Thanks to his membership in a gifts-in-kind organization, he can often provide it. During the dozen years his church has belonged to a gifts-in-kind organization, he has provided church members and others in need with items including tools, clothing, cleaning supplies, writing paper, pens, pencils and crafts.
“I can do things I would never be able to do with help from our gifts-in-kind program,” Mohler said, noting that the free items help him regularly serve more than 1,000 people.
Mohler sometimes cuts cost even more by picking up large orders himself rather than paying for shipping costs. Obviously, that isn’t practical for everyone, but it is one more way churches can stretch their dollars.
Besides donating items to the community at-large, churches can use gifts-in-kind organizations to stock their offices with equipment or supplies, or to provide needed items such as art supplies to their schools. The only restriction is that participating organizations must agree to act in accordance with IRC section 170(e)(3), which states that merchandise must be used for the care of the ill, needy or minors. It cannot be bartered, traded or sold.
With gifts-in-kind organizations, churches can both spend less on items they need to keep their ministry running while also providing more help to the communities they serve. It’s a way to cut costs while actually doing more.
While not every church will save millions like Nelson Randolph, the prospect of saving thousands by joining a gifts-in-kind organization is certainly within reach.
For more information, churches can call 1-800-562-0955 or visit NAEIR’s website at www.naeir.org.
Gary C. Smith is the president and chief executive officer of the National Association for the Exchange of Industrial Resources (NAEIR), the oldest, largest gifts-in-kind organization in the U.S. NAEIR receives donations of excess inventory from American corporations and distributes the material to a membership base of more than 13,000 charities. It has collected and redistributed more than $3 billion worth of new, donated supplies and equipment since its founding in 1977. On average, NAEIR members acquire more than $18,000 worth of free products per year for their organizations. www.NAEIR.org