I have long advocated that nonprofits need to do more to not only thank their donors but encourage donors to give gifts of donated property or other non cash items.
However, few nonprofits have distinguished themselves with any real “point of difference” as to why you should give “your stuff” i.e. any non cash item to them
versus any other cause.
Most nonprofits default by taking the approach to passively sit back and just hope non cash donations will roll in. Further I believe nonprofits are simply relying on what they themselves perceive as the value of “good will” they may or may not have actually established in the community they serve.
Is this really the best approach? Honestly, I don’t think so!
Again, in most communities nonprofits like Salvation Army, Goodwill, Habitat for Humanity and many domestic violence centers have established resale stores for used goods. The money made in these establishments has become very important in paying for
operational expenses. Yet, little is done in most cases to promote donating to these causes. A case in point: How many nonprofits do you know that actually have a line item for marketing in their budget?
Let’s switch gears for a moment and let me ask you to think about what would happen if Wal-Mart simply decided to just stop advertising? Sure they are so huge folks might not notice at first. Yes, I know their prices are low, but how long do you think it might take for people to start wondering if they were really getting the best deal?
Unlike Wal-Mart nonprofits get items given to them FREE. So, if you are interested in generating revenue for your nonprofit and your actual “cost of goods” is zero, then doesn’t it make sense that you might want to try harder to sell more?
So in a nut shell how does the nonprofit go about doing a better job?
First, you must treat each donor as if they were your only donor! That is right I am talking individual attention to detail. However, if you want to just pass out blank donation forms like candy and ignore your most valuable asset i.e. your donor, then by
all means continue to do that!
I realize nonprofits are “scared” because they want to make sure they are not breaking any rules and they do not want to get caught up in the evaluating the value of the donated property to a charity. I am not in any way proposing that they do this!
I understand that the value of a specific donated item can be and often is difficult to determine. In general, however, the value of most gifts is what is know as the “fair market value” of the property at the time of the donation, but there are some exceptions to this rule. See: Contributions You Cannot Deduct
Fair market value is the price at which property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the relevant facts. One example often sited is that of used clothing. The fair market value of used clothing and other personal items is usually far less than the price you paid for them. There are no fixed formulas or methods for finding the value of items of clothing. However, according to the IRS you should claim as the value the price that buyers of used items actually pay in used clothing stores, such as consignment or thrift shops.
Also, in IRS Publication 526 it states: You cannot take a deduction for clothing or household items you donate unless the clothing or household items are in good used condition or better. There, however, is an exception. You can take a deduction for a contribution of an item of clothing or a household item that is not in good used condition or better if you deduct more than $500 for it and include a qualified appraisal of it with your tax return.
Even with all the above confusion you can establish a true “point of difference” in your community when accepting donations!
First and foremost you need to establish a protocol that every member of the board and every staff member and volunteer knows that when a donor comes in with ANY item they wish to donate it is treated with not only respect but as if you were handling a rare piece of art. Immediately who ever is receiving the donated item genuinely thank the donor and tell them how much their donation matters.
Now is the perfect opportunity to not only get the person’s name and address but email address and find out more about what motivated them to donate to your cause. Also, place in their hand a simple one piece front and back sheet of information that talks about the mission and vision of the nonprofit as well as the contact information and hours of operation. Offer the donor a cup of coffee, a soft drink, or even a tour of the facility if they have never stopped by. Treat them like a guest versus someone bothering you.
Seize the moment! Make the donor realize that your nonprofit is no ordinary nonprofit but one that truly cares about the donor! The first impression of any and all donors will be critical if the organization ever expects to receive repeated gifts.
I honestly could go on for hours about the next steps, because there are many!
If you want more information I’ll be happy to share what I know just send us an email. Please keep in mind that due to the traffic the site receives there may be a delay in answering. Also, make sure to include relevant information about your nonprofit. I like to tell people that I need to know the: Who, What, When, Where and Why before I can really help determine the best course of action might be in your circumstance. People who send me one line emails with little or no information are often pushed to the bottom of the pile. Why, Well I figure if you don’t care enough to elaborate, in detail, on the issue you are concerned about then my response is not a priority.
DISCLAIMER: This information is not intended to provide legal or accounting advice, or to address specific situations. Please consult with your legal or tax advisor to supplement and verify what you learn here.