NAEIR

Dos & Don’ts for Donating Children’s Goods to Hurricane Victims


A message from Gary C. Smith, President and CEO of NAEIR, the largest gifts-in-kind organization in America.

One of the great things about American children’s retail and manufacturing companies is that when disaster strikes, many of us want to help. Our response is often a powerful urge to rush what we think will be helpful supplies straight to the disaster zone.

Think twice! Very often, such supplies do more harm to good. In the chaotic aftermath of a storm or flood, goods are often left to go to waste. For example, we recently learned that more than a year after Hurricane Maria devastated Puerto Rico, 10 trailers full of rotting, rodent-infested donations were discovered in a parking lot,

Worse yet, these spontaneous donations can clog up valuable staging space and transportation zones, hampering relief efforts of those on the ground. After Hurricane Mitch hit Honduras, cargo planes carrying life-saving supplies were unable to land because the runways were covered with boxes of useless winter clothing donations.

This is such a wide-spread problem, relief workers have dubbed it “the disaster after the disaster.”

However, companies can truly make a difference for victims of disasters. Here are two things you can do that will make the right kind of difference:

  • Make a financial contribution to a reputable not-for-profit that specializes in disaster relief and has a proven track record of delivering aid. That way, your donated funds can be used to purchases what’s needed most – often food, water and medicine.
  • If you have goods you’d like to give, don’t ship them to the disaster site: donate them to a national gifts-in-kind organization. These are 501c3 nonprofits that accept corporate product donations (aka “gifts-in kind”), then redistribute them to qualified nonprofits upon request. They have a process in place for delivering goods into the hands of those who are primed to receive them, after confirming they’re qualified nonprofits.

For corporate donors, joining a gifts-in-kind organization is simple and free (generally, you simply complete an online form). Once your company is accepted, you can donate at any time.

How it works: you provide the organization with an inventory of your donation, and once it’s approved, ship it to a designated location. The organization takes it from there.

In addition to corporate-wide gratification, there are compelling business benefits here. Product donations are tax deductible. In fact, if your firm is a C Corp, it’s eligible for a tax deduction up to twice the cost of the merchandise you donate, thanks to a little-known section of tax code, IRC Section 170(e)(3).

Gifts-in-kind donating is also an easy way to keep inventory current and warehouses in order, since overstocks, out-of-season merchandise and even returns are accepted. In addition, your organization will advise you what specific charities requested and received your goods – providing some good news to share with employees and customers.

In short, it’s a great thing when America’s corporate citizens want to help victims of natural disasters, as well as those in need year-round. But to be truly helpful, it has to be done right.

About National Association for the Exchange of Industrial Resources

Galesburg, Illinois-based NAEIR, National Association for the Exchange of Industrial Resources  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.

The gifts-in-kind organization provides FREE merchandise year-round, including clothing, office, maintenance and janitorial supplies, paper goods, plus much more. Learn more by visiting naeir.org. Gary C. Smith may be reached at 800-562-0955.

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National Association for the Exchange of Industrial Resources


Children’s retailers, are you suffering from inventory headaches? Five ways you’re triggering them.

Do children’s retail products inventory managers enjoy a good headache? Why else would so many waste time, drain profitability and divert focus away from core business priorities by mismanaging excess inventory? Whether you prefer a pounding or splitting headache, here are five surefire ways to trigger one now or later. By relying on these common strategies, you might as well just be banging your head against the wall anyway.

  1. Make like an ostrich…put your head in the sand!

Ignore a problem and it will surely go away, right? Just put off decisions about what to do with your slow-moving children’s inventory. You can deal with the growing inventory, expenses and taxes later.

  1. Lease additional space.

Out of sight, out of mind. Lease additional warehouse space and spend your company’s money by contributing to the profitability of storage and logistics warehouse companies.

  1. Liquidate.

Go ahead, sell excess inventory at a dime or pennies on the dollar. Or better yet, give it away to employees as a bonus, and watch it pop up on eBay or in other secondary markets. Then wonder why old inventory is competing against your company’s efforts to sell current stock, why everyone seems to be waiting for your next giveaway or price reduction, or why you’re fielding calls from unhappy customers because your inventory is cutting into their sales and profit margins.

  1. Continue selling it.

Do the same thing over and over again – maybe you’ll be the first person to get a different result. Children’s items are outdated and stale, sales are stagnant, but hey, maybe things will pick up.

  1. Send it to a landfill.

You must really be looking for a public relations headache. Because when the media finds out that your perfectly good merchandise is taking up space in a landfill, you’ll have a doozey.

Seriously, though, don’t you already have enough headaches?

Luckily, there’s a way to eliminate inventory headaches without even popping any pills, and it’s a solution that turns a problem like excess inventory into a positive – for the company’s reputation and bottom line.

IRC Section 170(e)(3), a little-known section of the tax code, allows Regular C Corporations to donate excess inventory and receive an up to twice-cost federal tax deduction. Donating your excess inventory to a gifts-in-kind organization not only will significantly reduce your tax obligation, it will get your excess, non-selling products into the hands of qualified, deserving nonprofits across the country.

Gifts-in-kind organizations solicit donations of valuable, new merchandise from American corporations and redistribute that merchandise to their members, which include schools, churches, government agencies and other nonprofit organizations in need of supplies. The donation process is easy, secure and flexible, and many gifts-in-kind organizations provide a range of free services to donors. They can accept shipments of supplies ranging from one box to dozens of truckloads, and in many cases, the freight charges to ship a donation to a gifts-in-kind program also are tax deductible. They also offer a great solution for companies that are consolidating warehouse locations. Gifts-in-kind organizations keep detailed records of merchandise donations and redistribution, so when tax time rolls around, companies know exactly who received their products and how much they received.

In addition, provisions in the tax code stipulate that donated product cannot be resold, bartered or traded and must be used in a manner consistent with the charity’s mission, which means your product won’t find its way back to the open market. Companies also gain brand protection through their donations. The allocation system for gifts-in-kind donations ensures that the products are distributed across a thinly closed market, providing protection from the brand and product devaluation that can occur when extra inventory ends up in the open market.

Typical Donation Items

  • office supplies
  • class materials
  • clothing and shoes
  • maintenance items
  • tools and hardware
  • toys and games
  • computer software
  • sporting goods, books, tapes and CDs
  • arts and crafts
  • personal care items
  • holiday and party items
  • janitorial supplies
  • and more

Many companies also take advantage of gifts-in-kind programs to manage items such as underperforming SKUs, discontinued models or colors, seconds, buybacks and returns.

Gifts-in-kind organizations offer a simple, pain-free cure for any inventory headache.

Guest Blog by Gary C. Smith

Gary is the president of the National Association for the Exchange of Industrial Resources (NAEIR), a gifts-in-kind organization based in Galesburg, Illinois. They like to say they are “in the Business of Empowering Generosity,” supporting communities by collecting merchandise donations from generous American corporations and giving it to those who need it most. For more information, contact NAEIR at (800)-562-0955 or donor@naeir.org, or visit www.naeir.org.