Creative Impact

Finding New Ways to Do Business in a High-fuel-cost Economy

An Aug. 3 story in The New York Times (“Shipping Costs Start to Crimp Globalization”) spotlights several companies that are changing the way they do business in order to address rising fuel costs.

Gifts In Kind International is specialized in efficiently placing quality product donations with community charities around the world. Shipping and transportation costs have an important impact on our mission. In fact, the changes that our donor companies are making to help address fuel costs are now affecting the quantity and variety of products that we make available to charities. 

Local Donation Programs Help Cut Fuel Costs

Rising fuel costs will continue to shape our global economy in the years to come. Because of our role as an international charity that coordinates the distribution of products globally, Gifts In Kind must also anticipate and be prepared to adapt to these changes.

Beyond that, our organization is offering corporate donors new ways to cut costs and optimize their supply chain management. When a retailer donates products through our Retail Donation Partner Program, they donate products directly from their retail stores to the local community, reducing reverse logistics expenses.

This means they spend less on both fuel costs for shipping inventory back to the distribution center and the related employee costs to continue dealing with these excess products. Today, Gifts In Kind manages approximately 7,000 retail locations in North America.

This not only empowers community charities to do more for people in need, it helps our corporate partners cut costs and reduce their corporate carbon footprint.
 

Finding Innovative Solutions for Donors and Charities

We have boosted our worldwide logistics capabilities, allowing companies to donate at manufacturing points around the world. As high fuel costs alter the global marketplace, this ability allows companies to optimize their supply chains by having Gifts In Kind pick up product donations at manufacturing sites around the world and donating them to local charitable organizations.

Gifts In Kind is working to find new and innovative ways to address rising fuel costs in order to continue offering low shipping fees to our member charities. Last year we worked smarter by adding additional 3PL warehouse locations to shorten the distance for shipping products and to keep our cost-per-mile below the industry average. A new integrated logistics management and inventory control system also allows us to manage additional warehouses more efficiently.

With all said…the increased cost of shipping and the shrinking economy will impact Gifts In Kind’s ability to continue providing exceptional value to both donors and charities. Since charitable organizations cannot bear the entire burden of increased shipping costs, we continue to search for innovative ways to do business. Because our corporate donors save a great deal from the services provided by Gifts In Kind, many are helping to subsidize the shipping costs in order to further enhance the impact they are having in the community.

As we continue to pursue innovative solutions for our own organization, I would like to hear comments and new ideas or suggestions from both companies and charities on this developing trend and concern.

Is Competitiveness and Branding Killing Collaborative Spirit?

Collaboration among nonprofits requires thinking outside of the box, stretching the comfort zone of self-preservation, and focusing resources on the social needs that we are founded to serve.

To collaborate effectively we need to check our egos at the door and accept the notion of working together for the greater good. With more than 1.6 million charities operating in the United States there is a tremendous redundancy and wastefulness in serving society. Staying competitive for a slice of the donation pie and establishing unique brand identity to stand apart have all but destroyed our charitable calling.

To create greater and lasting impact we must work together and share our strengths and resources. In doing charitable work, it is not about “us,” it is about the needs we serve.

At my organization, we also advocate collaborative efforts among donors—especially corporate donors. This October we are bringing together corporate donors to share their best practices and innovative ideas in product philanthropy—probably the first event of its kind in corporate giving history. Besides sharing, we also are bringing these donors to the table to discuss the potential for collaboration in addressing today most urgent social needs.

Many of our donors are committed to helping at-risk children, improving education and many other important causes. Instead of a fragmented approach to these most challenging issues, we invite each to explore opportunities to partner with nonprofit organizations and other corporations.

Being socially responsible is measured by the real impact that one creates. We can multiply the impact of our work if we learn to work together.

Today’s Nonprofits Must Incorporate New Strategies, Better Planning

In-kind Resources Can Help Leverage Dwindling Cash Resources

All nonprofit boards today expect their staff to raise funds from corporate donors as if it is a relatively easy task. This is a hefty challenge for all nonprofits, large or small, as they must compete with many others in a lagging economy. 

Of the $300 billion donated in the United States annually, less than 5 percent ($13 billion) is contributed by corporate donors (Giving USA). Almost half of those corporate donations are non-cash contributions.

Although non-cash donations have increased substantially over the past five years, many of the 1.6 million nonprofits in the United States are not prepared or equipped to receive product donations. As we creep closer to a possible recession, more of them should consider these resources as a useful and necessary tool for leveraging cash resources.

While it is easier to take cash donations that can be neatly deposited in and disbursed from the nonprofit bank account, more than $6 billion worth of in-kind corporate donations should not be ignored. They are valuable resources that can boost the programs of those who are creative enough to use them. Accepting and soliciting in-kind donations requires planning, some storage and volunteer help. 

For example, instead of spending money on office supplies, community nonprofits could receive these products from donors such as Office Depot. Those participating in this company’s donation program are required to pick up donated products 3-4 times a year at the local store. This effort allows the nonprofit to better use its cash resources for program services. Surprisingly, many nonprofit organizations do not include product donations in their fundraising efforts because their staff is already overstretched.

However, in today’s current world of shrinking government funding and donor cash contributions, nonprofits must consider leveraging their resources in order to maintain or maximize their program impact. Seeking corporate in-kind donations would allow them to enhance their program output. Development staff should consider all resources—both cash and non-cash—to maintain organizational impact. Finding the resources necessary to address the wide range of social issues facing our society today requires creative thinking! 

A wonderful housing program in a rural Pennsylvania community has found that building homes for low-income families is no longer financially feasible on a regular basis. Instead of sitting idle and wait for additional funding, this program is helping the community in a unique way. By receiving building and home improvement supplies donated by The Home Depot (Framing Hope Product Donation Program), this small nonprofit distributes these donated products to low-income people in the community who are struggling to maintain their homes. Creativity allows them to continue to address needs in their community.

Several other stories that attest to the perseverance and creativity of community nonprofit organizations across the country are available at www.giftsinkind.org. Feel free to email me and I will be happy to add you to our newsletter list.