Don't Overlook In-Kind Giving

May 23, 2006

By Abny Santicola, editor, FS Advisor

The most traditional form of cause marketing occurs when a company promotes a product whose sale benefits a charity in some way. A prime example is an offer that Hewlett-Packard was promoting that promised to donate $50 to the Lance Armstrong Foundation with every purchase of a specific HP laptop.

But Richard Wong, president and CEO of Alexandria, Va.-based Gifts in Kind International, a charitable organization that channels product donations from for-profits to nonprofits, says that organizations should open themselves up to in-kind giving from corporations as well. "Right now over 48 percent of corporate contributions are in the form of non-cash contributions, in kind. And that number actually is growing," Wong says.

Many corporations actually manufacture products with the sole intent of giving them to charity, he adds. GIKI handles the distribution of all types of products ranging from IBM computers donated to primary schools in India and Southeast Asia, to General Motors engines donated to high schools in the United States for students training to be mechanics and engineers, to personal hygiene products from Gillette donated to homeless shelters and women-empowerment programs around the country.

Such corporations are interested in supporting causes in a way that also allows them to get their products out into the community. "They are giving products because they know that the more products they distribute in the community, the higher the brand awareness they can get and more loyalty that they can build," Wong says.

Two keys to success for nonprofits trying to net cause-marketing relationship of in-kind products are: 1) understanding the decision-making process of the corporation, and 2) accountability for how the products are used.

Understanding the corporate process and how to engage corporate decision makers and create a program that engages everyone from the employees to the CEO is important, as is structuring a program that allows the corporation to really get its hands dirty in the mission of the organization. Allowing the for-profit to help in the decision-making process of the organization and engage with its mission will produce the most successful type of relationship, Wong says.

In terms of accountability, Wong says GIKI generates reports on each of the in-kind giving programs it manages, detailing things such as how many products were provided, who the recipient was, how the recipient benefitted from the gift, the program impact of the donation and the level of awareness in the marketplace that was generated as a result, which reassures the corporate donors. "We feed those reports on a quarterly basis back to corporations, and they love it. They see the value," he adds.

Richard Wong can be reached via www.giftsinkind.org.