Make in-kind donations part of your small business’s charitable giving

donate-1426736_640By Mark G. Auerbach

As we fast forward to year’s end, we think of “the spirit of giving” at the holidays. November 15 is National Philanthropy Day, when non-profit organizations, professional fund-raisers, and philanthropists celebrate those individuals and businesses who give back to the community for the greater good. The Tuesday after Thanksgiving, days after Black Friday, the non-profit world has developed Giving Tuesday, a day devoted to encouraging contributions by credit card online.

Many small businesses don’t have the large cash amounts on hand to be big philanthropists, but you can be philanthropic by offering products and/or services to non-profits. And, non-profits have many needs that can be fulfilled with in-kind gifts.

Connie Sanderson was a fundraiser and later executive director for the Vermont-based New England Kurn Hattin Homes from 1988, until her retirement last year. She’s remained on board as a major gifts director. Ninety-four percent of Kurn Hattin’s annual budget of $5.4 million is supported by contributions.

“We value in-kind gifts according to IRS regulations for purposes of receipting, and list them separately, apart from cash annual fund donors, in our Annual Report,” says Sanderson. “Small businesses receive recognition in our Bulletin in the Corporate Donors listings as well. If they are part of a special project, for example, funding basketball hoops, they would be listed in a press release,” she added. ”And, Kurn Hattin maintains a wish List for those considering an in-kind gift.”

Sanderson says that any business, large or small, can participate in philanthropy. “Small businesses are in a position to impact and improve their community by joining with their peers in business to support local charities. In addition, in some instances like our organization, their future employees could be alums of Kurn Hattin and the small business would be investing in their own companies’ future.”

Kathy Tobin was a television news reporter, anchor and news director who volunteered with many small non-profit organizations and fundraisers. Eight years ago, she left the news business to become a fundraiser with small non-profits, first at Friends of the Homeless in Springfield, MA, then with the Food Bank of Western Massachusetts, and now with the much larger Baystate Health Foundation.

Tobin says that any lasting relationship has to work for both parties.  “While parity between supporters is important, it’s also necessary for non-profit organizations to maintain enough flexibility so they can help donors achieve their goals as well.  For example, if the small business doesn’t want or need a whole table at your event as part of their sponsorship, but they do want a bigger ad in the program, adjust the ad size and give them fewer seats.”

Tobin believes that with the right partner, you will get more from your philanthropic efforts than you give every time.  “First of all, sharing is the right thing to do, and it makes you feel good,” she says.  “It can make your employees feel good, too, because perhaps they share your values or their come to know what your values are.”  Tobin adds “And with some thought you can meet real company goals whether it’s team building, advertising, community involvement. The charity you partner with should be interested in how you can succeed together.”

If your business wants to support a non-profit with an in-kind gift–a donation of product or services–before year’s end or in the next calendar year:

-Before you make the gift, make sure the organization wants your product or service. There is always an interest in food and wine for special events, but legal services for example, may already be covered by an attorney on the organization’s board. Start by approaching the organization’s advancement or development department.

-Price the value of your product or service donation at a fair market rate. If you’re a baker, charge the same for your cookies as you do in your store. If you’re an accountant or a printer, charge the same rate you would for a client. Don’t inflate anything. Ask your attorney and/or accountant about how you might use this gift for tax purposes.

-Make sure you and the organization are clear on your contribution and its value. Provide an invoice or receipt or the products and services traded. Spell out the recognition components you expect to receive.

-Remember that whether you make a cash or in-kind donation, you and the organization are forging a partnership. Both parties have expectations that they hope will be met.

-It’s okay to let others know that you’ve supported a community program or service. It makes you and your business look good and helps spread the word about the charity. If the recognition components can be used as part of your marketing and public relations efforts, better yet.

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Mark G. Auerbach is principal at Mark G. Auerbach Public Relations, a Springfield, MA, based marketing, public relations, development and events consultancy. You can find more information about Mark at Facebook and LinkedIn.

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