A Tax-Friendly Way for Businesses to Help Teachers with Supplies

By Gary C. Smith.

There is a good chance that many teachers are paying for classroom supplies with their own money. In these days of shrinking school budgets, they have become an expert in doing more with less.

Probably, no one has told them that many of these same classroom supplies are available at no cost to teachers through something called a gifts in kind organization.

Gifts-in-kind organizations are not-for-profits that secure corporate donations of new merchandise and redistribute the items to not-for-profits members, which may include schools and individual teachers.

Donations include classroom essentials, office supplies, arts and craft materials, educational products, books, backpacks, party goods, cleaning supplies, sporting goods, software, and much more.

Donors include leading American companies. In return for their donations, they receive significant tax deductions. In addition, it’s a great way for them to clear older or overstocked merchandise out of their warehouses and doing a good thing for schools.

The rules are straightforward. According to Internal Revenue Code section 170(e)(3), donated merchandise must be used for the care of the ill, needy or minors. It can’t be bartered, traded or sold, and must be given directly to qualifying individuals served by an organization or used in the administration of the organization.

Belonging to a gifts-in-kind organization costs teachers a fraction of what it would cost to purchase the same supplies in stores or online.

Many students do not have supplies and sometimes use the lack of supplies to disengage. Gifts in kind allows teachers to buy things they normally would not be able to afford for their classrooms.

If ‘doing good’ is a very important concept to your clients’ companies, check out gifts-in-kind programs.

====

Gary C. Smith is President and CEO of the National Association for the Exchange of Industrial Resources (NAEIR), the oldest and largest gifts-in-kind organization in the U.S. Based in Galesburg, IL, NAEIR receives donations of excess inventory from American corporations and distributes the material to a membership base of more than 13,000 charities. It has collected and redistributed more than $3 billion worth of new, donated supplies and equipment from its 450,000 square foot warehouse since it was founded in 1977. For more information, visit NAEIR’s website at www.naeir.org. or call 1-800-562-0955.

Taxes