Government agencies find key resource in gifts-in-kind organizations

By Gary C. Smith

Municipal leaders around the country face the daily challenge of trying to do more with less. Securing the funds and resources that government agencies need to carry out their important missions has never been more difficult.

But there is a resource that can help.

Gifts-in-kind organizations solicit donations of valuable, new merchandise from American corporations and redistribute that merchandise to their members, which include government agencies, schools, churches and other nonprofit organizations.

Companies donate merchandise to support government programs and charitable organizations, take advantage of tax deductions and clear out warehouse space. Government agencies typically pay a small membership fee and nominal shipping and handling charges to participate in gifts-in-kind programs, but the merchandise itself is FREE—allowing government programs to take advantage of the materials and divert the savings to other agency needs.

State and local governments take advantage of gifts-in-kind donations to support the work of housing authorities, police and fire departments and other social service programs. For example, gifts-in-kind programs provide blankets, cleaning supplies and clothing to housing authorities, toys for police department outreach programs, and basic necessities for fire departments to have on hand to help victims of fires.

Companies like Microsoft, Stanley Tools, 3M, Rubbermaid, Rand McNally, Reebok, Gillette, Xerox, Hallmark and thousands of others make gifts-in-kind contributions. Items donated include office supplies, clothing and shoes, maintenance items, tools and hardware, toys and games, computer software, sporting goods, books, tapes, CDs, arts and crafts, personal care items, holiday and party items, janitorial supplies and more. Government agencies can browse catalogs of donated merchandise and request what they need.

Organizations that accept gifts-in-kind donations must agree to use the merchandise received in accordance with IRC section 170(e)(3), which states that the merchandise must be used for the care of the ill, needy or minors and cannot be bartered, traded or sold. The merchandise can be given directly to the qualifying individuals served by an organization or used in the administration of the organization.

In today’s economy, many families are forced to look to government agencies for assistance. The need for supplies and materials is great, and membership in gifts-in-kind organizations allows government programs to obtain free, top-notch merchandise to support their efforts.


Gary C. Smith is the president and chief executive officer of the National Association for the Exchange of Industrial Resources (NAEIR), the oldest and largest gifts-in-kind organization in the country. NAEIR, based in Galesburg, Illinois, solicits and receives donations of excess inventory from American corporations and distributes the material to a membership base of more than 13,000 government agencies and charities. It has collected and redistributed over $3 billion worth of new, donated supplies and equipment since its founding in 1977.  Interested companies can contact NAEIR at (800)-562-0955, to get a free information packet on how they can lower their taxes through an up to twice-cost federal deduction while reducing their excess, slow-moving inventory.

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