NPOs should have readily available lists of goods and services needed. Maintaining such lists on the website should be routine. Not doing so can mean either not receiving what is needed (and having to pay for these), as well as being offered or simply delivered, often vast quantities, of items not required. This can result in staff and volunteers having to spend valuable time dispensing with unwanted and unneeded goods. These may need recycling (sometimes at a cost) or arranging to pass on to an NPO that can use them.
All donations-in-kind must be thanked for – taking precious time. It can be a little difficult to word a letter of thanks – in which one also has to explain that the goods were not needed…
Failing to clearly communicate which items or services are needed, is likely to result in unusable goods. Social media offers an immediate and ongoing additional opportunity to tell people what is required. This works particularly well for emergency needs too. It’s easier to manage free professional services than it is goods. Again, these are best identified, detailed and sought. With the acid test being that such services would have to be paid for if not donated. These costs should be included in budgets.
All useful and important donations-in-kind, whether of tangible items or specialist services, should be reflected in an NPO’s financial statements. They should show in a line item under ‘Expenses’ and their monetary value offset as ‘Income’. Failing to do so can appear as a large jump in expenditure year-on-year should a source of donated goods or services cease. Donors ask questions about big increases in expenses. Therefore, if the items or services were vital, they would have had to been paid for if not donated. Include these in budgets and accounting.
Goods and services not vital to an organisation and not budgeted for, often luxuries, should not be included in accounting. These are often treats for those served and are mostly offered to an NPO. They may include outings for residents, special gifts or treats such as make-up lessons for girls in orphanages, sports or other coaching for youths or any goods or experiences not usually planned or budgeted for.
It’s important to respond carefully to offers of services. Often these are well-meaning and don’t come with strings attached. However, do clarify whether a service provider wants anything in return, and, if so, exactly what their expectations are. Do this, in writing, ahead of any service delivery. They may want to grow a list of referees or simply be offering their professional input to comply with a legal requirement.
Despite one’s best efforts to manage donations-in-kind, these can become a flood of donated items that cannot be used by an organisation. One of the most successful solutions can be to have a second-hand goods shop. This will generate vitally needed unrestricted income (and impress donors). Ethically, it is important to have it known that items that the NPO cannot use, will be sold. The vast majority of people giving the goods are happy with this. Another option is to know the needs of a few other organisations and have them ready to accept (and preferably fetch) donated goods that cannot be used.
