It is almost impossible to find a retailer these days that isn’t focusing on social-responsibility initiatives, and searching for unique ways on how to “give back” to the communities they operate in. Often, this includes unveiling a newfound focus on philanthropy.
However, as the economy gets tighter, many retailers find themselves trying to support their new social-responsibility programs on thinning operating budgets. One possible solution is a partnership with Gifts In Kind International, which allows retailers and other companies to look beyond monetary donations and reward communities with in-kind gifts.
“In-kind gifts are a wonderful way for retailers to build local brand loyalty, engage employees and shareholders, and make a personal impact on the local community,” said Richard Wong, CEO and president, Gifts In Kind International, Alexandria, Va.
The 25-year-old company, a spin-off of the United Way of America, was created specifically to handle in-kind donations. By tapping its network of 120,000 U.S. charities, Gifts In Kind creates unique programs that expand retailers’ impact on society, and benefits members in their local communities.
To date, the company, which ranks as the eighth-largest charity in the United States, has established programs throughout 6,500 retail stores. It has won accolades from charity watchdog groups for its fiscally responsible management. It operates on 0.3% of the fair market value of its donations, meaning that 99.7% of all donations go directly to communities and people in need.
While the programs ultimately benefit the community, it is the employees that tend to hold retailers accountable for each program’s success, according to Wong.
“More retailers are recruiting employees under the age of 45, and this younger generation wants hands-on experience beyond just collecting a paycheck,” he explained. “They want to engage in ‘giving’ efforts. And the more programs retailers support, the higher their employee retention and morale becomes.”
In a discussion with senior editor Deena M. Amato-McCoy, Wong detailed how Gifts In Kind helps retailers stay true to their corporate responsibilities and leverage the power of in-kind donations.
What is spurring retailers’ efforts to be good corporate citizens?
Consumers are becoming more interested in the environment and their community, especially as younger shoppers make up retailers’ demographics.
Generations X and Y are interested in “doing more good” in their everyday lives, and they want their favorite brands to feel the same way. If a retail brand becomes more socially responsible and more engaging within the community, this growing demographic is more willing to give their loyalty to that retailer.
How important is philanthropy in these endeavors?
Very much so. It has become a strong part of retailers’ images. By having a stronger focus on the community, retailers are expanding their customer base, and they are also bolstering recruitment. Gap and The Home Depot are perfect examples of companies that have pulled out the stops to give back to the community. And their employees are so satisfied that not only are retention levels higher, so is morale.
What makes Gifts In Kind International different?
Donation programs are very important to retailers, but there are very few companies that manage in-kind donations. We create the marriage between a retailer and a charity, and we make it easy for the charity to pick up donations on a weekly or monthly basis.
Can you define an in-kind donation?
To me, I consider in-kind donations to be any type of non-cash donation. This can be services, merchandise or even volunteered time—which often speaks volumes to employees.
On your blog, you wrote, “As we creep closer to a possible recession, more [retailers] should consider these resources as a useful and necessary tool for leveraging cash resources.” What exactly do you mean?
Well, if companies leverage their internal merchandise, services and labor resources, rather than make a monetary donation to a charity, they can save tons of money. For example, if a retailer like The Home Depot decides to work with a housing shelter or a group like Habitat for Humanity, it could donate floor tiles, tools or other merchandise, rather than donate $50,000 to $75,000. That’s an outstanding way to help the community and still stretch their budget.
They also save operational costs. By fulfilling merchandise donations directly from stores or distribution centers, companies don’t incur the added logistics or transportation costs of sending product to a secondary location, like a cross-docking facility or a separate warehouse.
Can you give an example of what a specific retailer is doing?
Bed Bath & Beyond donates an average of $25,000 per store to a charity called The Refugee Resettlement for the Horn of Africa, which caters to families resettling in the Washington, D.C., region. Each store has a section of its back room dedicated to the charity. All families resettling in D.C. are invited to visit these storerooms and pick up merchandise for their new homes. All merchandise is donated by the company, and distributed free to these residents.
Who conceives program ideas—Gifts In Kind or your retailer partners?
We both do. Since we don’t believe in cookie-cutter programs, we like to learn about what is important to our retailer partners. The process begins with a conversation with the retailer so we can understand their corporate-giving guidelines. Each retailer typically knows the type of charity it wants to help. This information helps us design a customized program that supports the retailer’s needs, and their community audience.
How long does it typically take to get a program together?
The longest planning period took eight months. The shortest one took 30 days.
Do you have any additional ideas for chains working to become good corporate citizens?
As I continue to visit with retailers—both current donors and new prospects—I find it interesting that there are still so many misconceptions about how in-kind donations can be a branding opportunity as well as a tax benefit.
That was the reason we are launching a conference this October. Here, we hope to educate retailers on best practices and innovative ideas that will help them achieve strong sustainability programs.