How Gifts-in-Kind Merchandise Can Offset Rising Costs From Tariffs

It’s difficult to keep track of the tariffs without a scorecard, especially now that the courts are involved in determining the legality of some tariffs imposed on other countries’ goods. 

Many American businesses are eyeing the current landscape with uncertainty, wondering how they’ll navigate rising prices and possible disruptions in the supply chain. Meanwhile, nonprofits may feel the impact of tariffs via rising operational costs, as well as changes to individual and corporate donor behavior.

So how can your nonprofit stretch its available dollars as these uncertainties persist. In the current climate, nonprofits have more motivation than ever to consider obtaining gifts-in-kind. Why?

Because gifts-in-kind merchandise is already in the U.S. A manufacturer, distributor or retailer that is looking to clear out overstocks and excess inventory donates these goods so nonprofits would have less need to pay market prices for obtaining these goods that include everything from office supplies and maintenance equipment to clothing and toys. Nonprofits are eligible to receive this merchandise — often at no cost aside from a nominal handling fee.

Gifts-in-kind merchandise can be used to meet any need. For example, your organization could provide a student with a warm sweatshirt for school or fill care packages for domestic and international mission trips. The only limitation is this merchandise must be used to fulfill the organization's mission or supplement classroom supplies. It may not be sold, traded or bartered.

Organizations can acquire thousands of dollars worth of free products per year for their clients and programs. One nonprofit, Teen Round-Up in Duncan, Oklahoma, which serves families in financial crisis and single-parent homes, decorated the organization’s Christmas tree and camp activity building with items obtained from a gifts-in-kind supplier. 

“We gave 260 children a giant gift bag filled with novelty items, clothing, educational items and toys,” Roxanne Kerley, vice president and camp director at Teen Round-Up, said. “The small cost to be a member is just a token compared to what we receive.”

What motivates companies to donate to gifts-in-kind organizations? It may be to reduce storage costs, clear warehouse space, 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.

Working with a gifts-in-kind organization means you can spend less on items you need while also providing more help to the communities and students you serve.

The preceding content was provided by a contributor unaffiliated with NonProfit PRO. The views expressed within may not directly reflect the thoughts or opinions of the staff of NonProfit PRO.