Ormita In-Kind Donations Guide

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In-Kind Donations

A guide to

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

Table o Contents

Overview ...2

What are “in-kind” What are “in-kind” donations? ...donations? ... 33 Why accept “in Why accept “in-kind” -kind” donations? ...donations? ...33 How donors beneft rom giving in-kind donations How donors beneft rom giving in-kind donations ...44 What is Ormita ...5

What is Ormita ...5

T Trading “Inrading “In-Kind” -Kind” Donations ...Donations ... 66 Global Product Placement and Sourcing ...7

Global Product Placement and Sourcing ...7

National Distribution Channels ...8

Facts and Figures Facts and Figures about Non-Cash about Non-Cash TTrade ...rade ... 00 The Process ... The Process ... Roles and Responsibilities ...4

Roles and Responsibilities ...4

Marketing Support ...5

Marketing Support ...5 The New Y

The New York Tork Times (Beyond the imes (Beyond the Git o Git o Cold, Hard Cash) ...Cold, Hard Cash) ... 66

This book is intended as a ree resource to assist Non-Prot Organizations in getting the most out o the Non-Prot In-Kind Donation Program and is not intended or This book is intended as a ree resource to assist Non-Prot Organizations in getting the most out o the Non-Prot In-Kind Donation Program and is not intended or recommended or any other purpose. It may be reely distributed on the

recommended or any other purpose. It may be reely distributed on the condition that it is condition that it is not altered any way.not altered any way. Although we have taken great care to ensure the accuracy o the inormation and advice in this

Although we have taken great care to ensure the accuracy o the inormation and advice in this book, neither Ormita International Limited, Ormita International LLC norbook, neither Ormita International Limited, Ormita International LLC nor any o our licensees, guarantees the

any o our licensees, guarantees the correctness, relevance or accuracy o anything in this correctness, relevance or accuracy o anything in this document or any web resource linked to document or any web resource linked to rom this document. Ormita International,rom this document. Ormita International, its owners and related companies / related individuals disclaims responsibility or any direct or indirect damage or loss resulting rom the use o this document and any its owners and related companies / related individuals disclaims responsibility or any direct or indirect damage or loss resulting rom the use o this document and any direct or indirect loss or damage resulting rom reliance on inormation published herein. The service oering described in this document is subject to change without direct or indirect loss or damage resulting rom reliance on inormation published herein. The service oering described in this document is subject to change without notice.

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Overview

In his book, the Mystery o Capital, Hernando De Soto calls unproductive, unsold assets In his book, the Mystery o Capital, Hernando De Soto calls unproductive, unsold assets

“dead capital”

and estimates there isand estimates there is

9.3 trillion dollars of it

9.3 trillion dollars of it world-wide

world-wide

..

Unsold production time, empty rooms

Unsold production time, empty rooms, unlled advertising space, vacant appointment time, depreciating, unlled advertising space, vacant appointment time, depreciating inventory

inventory, mislabelled stock, end-o-line items, last seasons merchandise, entry tickets or idle assets , mislabelled stock, end-o-line items, last seasons merchandise, entry tickets or idle assets are allare all items which

items whichcan be donated to can be donated to non-proft organizationnon-proft organizations in s in needneed..

For some businesses, providing in-kind donations to organizations

For some businesses, providing in-kind donations to organizations doing good work in doing good work in their community istheir community is the easiest way they can support you.

the easiest way they can support you. They maThey may not be y not be able to provide direct able to provide direct nancial donations, but it’s arnancial donations, but it’s ar easier or them

easier or them to simply share resources or to simply share resources or expertise they already have.expertise they already have.

Unortunately

Unortunately, due to lack o , due to lack o storage capacity, issues with handling, inappropriateness o the donated itemstorage capacity, issues with handling, inappropriateness o the donated item or other logistical

or other logistical issues, many non-prot organizations turn away a constant supply o substantial in-kindissues, many non-prot organizations turn away a constant supply o substantial in-kind donations, most o which end up in landlls.

donations, most o which end up in landlls.

Ormita oers the opportunity or your organization to accept virtually any in-kind donation and turn it into Ormita oers the opportunity or your organization to accept virtually any in-kind donation and turn it into things that you need.

things that you need.

•

•Using the Ormita trading Using the Ormita trading platorm, your organization can trade unwanted in-kind donations orplatorm, your organization can trade unwanted in-kind donations or essential goods and services that you need.

essential goods and services that you need.

•

•There is little to no handling o the products by your organization.There is little to no handling o the products by your organization.

•

•Our sta is Our sta is courteous and proessional and will courteous and proessional and will always treat your donors with respect, ensuringalways treat your donors with respect, ensuring that they will return to

that they will return to your organization the next time your organization the next time they have a charitable donation to make.they have a charitable donation to make.

•

•We strive to make donating a hassle We strive to make donating a hassle ree experience.ree experience.

•

•There is no ee or our service to There is no ee or our service to your organization or your donors.your organization or your donors.

•

• Y You receive the maximum possible return ou receive the maximum possible return rom donated goods and rom donated goods and services.services.

•

•Our solution is environmentally riendly and socially responsible.Our solution is environmentally riendly and socially responsible.

There are billions o dollars o

There are billions o dollars o goods and services just waiting to be accessed by your organizationgoods and services just waiting to be accessed by your organization through the Ormita in-kind

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3

3 “Supplement your cash with new “in-kind” donations?

“Supplement your cash with new “in-kind” donations?

An

An “in-kind” “in-kind” donation is a donation is a contribution o time, service contribution o time, service or goods or goods made by a made by a donor to help donor to help support thesupport the operations or services provided by your organization. It isn’t cash. T

operations or services provided by your organization. It isn’t cash. Thereore the donor does hereore the donor does retain aretain a degree o control

degree o control over the donation. over the donation. This doesn’t occur when a donor This doesn’t occur when a donor gives you a cash donation.gives you a cash donation. Because o

Because o this this “relationship”, donors products need “relationship”, donors products need to be to be used eectively and used eectively and ecientlyeciently. . They also needThey also need to know that their product is not going to

to know that their product is not going to end up on-sold to a competitor or an existing cash end up on-sold to a competitor or an existing cash customer.customer. Some examples o in-kind donations

Some examples o in-kind donations include:include: •

•BooksBooks •

•Food suppliesFood supplies •

•Medical kitsMedical kits •

•Oce equipmentOce equipment •

•PrintingPrinting •

•RereshmentsRereshments •

•Telecommunications equipmentTelecommunications equipment

Why a

ccept “in-kind”

donat

ions?

.

. You can acquire goods and services that you need without spending cash You can acquire goods and services that you need without spending cash

The cash you save can be used to

The cash you save can be used to pay or other products or pay or other products or services that you have not been ableservices that you have not been able to acquire through the Ormita donation process.

to acquire through the Ormita donation process.

2.

2.Expands your capacityExpands your capacity

Y

Your organization can our organization can suddenly acquire goods and suddenly acquire goods and services which you otherwise might services which you otherwise might nevernever have purchased. More printing, radio advertising, better equipment etc.

have purchased. More printing, radio advertising, better equipment etc.

3.

3.Builds relationshipsBuilds relationships

Approaching a prospective donor and receiving an in-kind donation provides an opportunity or Approaching a prospective donor and receiving an in-kind donation provides an opportunity or that person or organization to support your cause without actually investing any cash. I the that person or organization to support your cause without actually investing any cash. I the do-nor likes how the donation issue is handled, gets a tax benet or nds that their product is placed nor likes how the donation issue is handled, gets a tax benet or nds that their product is placed in a new market, they may take an even greater interest in the activities o your organization. in a new market, they may take an even greater interest in the activities o your organization. An in-kind donation can be the beginning step o a substantial rela

An in-kind donation can be the beginning step o a substantial relationship.tionship.

4.

4.Provides a way or your donors to continue giving during tough timesProvides a way or your donors to continue giving during tough times

An in-kind git’s market valu

An in-kind git’s market value can be more than double the e can be more than double the value o a cash donation rom thevalue o a cash donation rom the same donor, since the git’s cost to the

same donor, since the git’s cost to the donor is only the product’s marginal cost, which mightdonor is only the product’s marginal cost, which might be only hal o its market price.

be only hal o its market price.

Moreover, many corporations have spare capacity that they could put to use or nonprots at a Moreover, many corporations have spare capacity that they could put to use or nonprots at a negligible extra cost to themselves; or example, transportation or shipping companies may have negligible extra cost to themselves; or example, transportation or shipping companies may have spare container space; IT consultancies, temporarily underutilized communications engineers. spare container space; IT consultancies, temporarily underutilized communications engineers.

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How donors beneft rom giving in-kind donations

Manuacturers, W

holesalers and

Retailers

•

•Takes excess product Takes excess product o-market, thereby retaining the market value o-market, thereby retaining the market value or their or their goods.goods. •

•Tax-deductible benets may be greater than Tax-deductible benets may be greater than income received rom a sale.income received rom a sale. •

•Creates savings in warehouse space, disposal costs and Creates savings in warehouse space, disposal costs and sta timesta time •

•I they plan to close or consolidate a warehouse or distribution centre, it may be moreI they plan to close or consolidate a warehouse or distribution centre, it may be more cost-eective to donate that inventory rather than move it

cost-eective to donate that inventory rather than move it to another location.to another location. •

•Helps to reduce waste and meet environmental goals.Helps to reduce waste and meet environmental goals. •

•Sta and customers want to see their surplus goods going Sta and customers want to see their surplus goods going to people in need rather than to theto people in need rather than to the dump.

dump. •

•Donated goods are Donated goods are generally only deductible at cost (not generally only deductible at cost (not market value). Using the Ormita In-Kindmarket value). Using the Ormita In-Kind Donation Program their donation is eligible or a

Donation Program their donation is eligible or a tax deduction at ull retail value.tax deduction at ull retail value. •

•Ormita eectively converts items which a charity may not be able Ormita eectively converts items which a charity may not be able to directly use into to directly use into goods andgoods and services they need.

services they need. •

•A single email or phone call to A single email or phone call to Ormita can take all o their surpluses o Ormita can take all o their surpluses o their hands.their hands.

Service Industries

•

•Allows or a ull retail value tax deduction or surplus time, space, unsold seats or service-relatedAllows or a ull retail value tax deduction or surplus time, space, unsold seats or service-related oerings.

oerings. •

•Provides a creative way or sta to give to their nominated charities without the need or time-o Provides a creative way or sta to give to their nominated charities without the need or time-o or cash rom their pockets.

or cash rom their pockets. •

•Can help ull a Can help ull a company’company’s philanthropic, environmental and/or social welare goals and s philanthropic, environmental and/or social welare goals and translatetranslate into goodwill.

into goodwill.

General Benets or Businesses

•

•Businesses who donate trade credits receive the up-ront tax benets at the time Businesses who donate trade credits receive the up-ront tax benets at the time o donation -o donation -even though they ma

even though they may only earn the trade credits at a y only earn the trade credits at a later date.later date. •

•Allows businesses to tie their giving to your sales or Allows businesses to tie their giving to your sales or customer activities without spending anycustomer activities without spending any additional cash to do so.

additional cash to do so.

When a business makes a donation to charity it comes

When a business makes a donation to charity it comes out o their proft margins. In-kind donationsout o their proft margins. In-kind donations are a way to reduce

are a way to reduce their idle production time, increase their idle production time, increase sta loyaltysta loyalty, create goodwill and publicity, create goodwill and publicity and access tax deductions.

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5

5 What is Ormita

What is Ormita

Ormita acts as a clearinghouse or the trade

Ormita acts as a clearinghouse or the trade o excess capacities, goods and services through a combinationo excess capacities, goods and services through a combination o online e-commerce, clearing, 24 hour telephone brokering

o online e-commerce, clearing, 24 hour telephone brokering and independent licensees and brokers.and independent licensees and brokers. At the core o the business is

At the core o the business is an electronic trading platorm that allows participants to trade their excessan electronic trading platorm that allows participants to trade their excess capacity or unsold time or:

capacity or unsold time or: •

•Cash-fow enhancing products and/or services Cash-fow enhancing products and/or services (advertising, media, public relations, special(advertising, media, public relations, special promotions, new product lines

promotions, new product lines, employee rewards, customer incentives etc)., employee rewards, customer incentives etc). •

•Already budgeted or products and/or services.Already budgeted or products and/or services. •

•Investments in new micro-enterprise and small businesses.Investments in new micro-enterprise and small businesses.

Rather than promoting direct trade between participants the Company brokers trades through a Rather than promoting direct trade between participants the Company brokers trades through a central-ized marketplace.

ized marketplace.

.

.Transactions are recorded in a centralized “ledger” which records the value o the items pur-Transactions are recorded in a centralized “ledger” which records the value o the items

pur-chased (debit) and sold (credit) - much like a clearinghouse does or stocks, or a commercial bank chased (debit) and sold (credit) - much like a clearinghouse does or stocks, or a commercial bank does or checks.

does or checks.

2.

2.This ledger system This ledger system utilises a utilises a “trade credit” “trade credit” as a as a method o method o accounting with 1 Taccounting with 1 Trade Credit rade Credit = $1.= $1.

3.

3. Just like any brokerage rm, Ormita receives a cash commission on Just like any brokerage rm, Ormita receives a cash commission on each transaction.each transaction.

4.

4.Non-prot donor and recipient transactions are not subject to this commission as they all withinNon-prot donor and recipient transactions are not subject to this commission as they all within the boundaries o the

the boundaries o the Company’Company’s Corporate Social s Corporate Social Responsibility Charter.Responsibility Charter.

Radio Station Radio Station

•

•Donates $2000Donates $2000 worth o

worth o AdvertisingAdvertising •

•Sells AdvertisingSells Advertising

Printer Printer

•

•Sells PrintingSells Printing •

•Buys AdvertisingBuys Advertising •

•Buys AccountingBuys Accounting

Accountant Accountant

•

•Buys AdvertisingBuys Advertising •

•Buys PrintingBuys Printing •

•Donates to CharityDonates to Charity

Charity Charity

•

•Receives DonationsReceives Donations •

•Buys PrintingBuys Printing •

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T

radi

ng

“In-

Kin

d”

Dona

tio

ns

Ormita provides non-prot organizations the option to

Ormita provides non-prot organizations the option to exchange their donated goods or servicesexchange their donated goods or services withwith other organizations in return or things that they need.

other organizations in return or things that they need. Instead o trading goods

Instead o trading goods and services directly, a non-prot organization will list their donated and services directly, a non-prot organization will list their donated product withproduct with Ormita and sell it

Ormita and sell it to another organization or “Oto another organization or “Ormita Credits”.rmita Credits”. Ormita Credits record the real

Ormita Credits record the real market value or the products or market value or the products or services acquired by each organization. 1services acquired by each organization. 1 Ormita Credit = $1 or the sake o

Ormita Credit = $1 or the sake o book-keeping.book-keeping.

These Credits can then be used to acquire other market-value goods or services without the need or cash. These Credits can then be used to acquire other market-value goods or services without the need or cash.

Ormita enables charities to tap into a donation source that: Ormita enables charities to tap into a donation source that:

•

•is dicult or many charities to is dicult or many charities to handlehandle •

•may require additional experience/expertisemay require additional experience/expertise •

•is currently a tiny part o is currently a tiny part o overall charitable givingoverall charitable giving •

•could add 10 to could add 10 to 30 percent to a 30 percent to a charity’charity’s annual donationss annual donations Receives an oer or some

Receives an oer or some

donated school books

Needs a photocopier Needs a photocopier Charity Charity Welare Welare Organization Organization Community Community Group Group School School

Receives oer or donated

medical equipment

Needs some school books

Receives an oer or some

donated printing credit

Needs some medical

equipment

Receives oer or a

donated photocopier

Needs some printing

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7

7 Global Product Placement and Sourcing

Global Product Placement and Sourcing

Ormita operates its own inrastructure in 38 locations on 5

Ormita operates its own inrastructure in 38 locations on 5 continents.continents.We have local contactWe have local contact points across the United

points across the United States, Australia, New Zealand, Italy and the United Kingdom as well asStates, Australia, New Zealand, Italy and the United Kingdom as well as regional contacts in the major cities o 44 countries.

regional contacts in the major cities o 44 countries.

Ormita can place donated products into new markets, allowing companies to trial their products, Ormita can place donated products into new markets, allowing companies to trial their products, create brand awareness or their goods and services and establish a presence in

create brand awareness or their goods and services and establish a presence in an a new oran a new or expanding market while contributing to your organizations

expanding market while contributing to your organizations welare.welare.

Australia Australia Argentina Argentina Belgium Belgium Bahrain Bahrain Brazil Brazil Bulgaria Bulgaria Canada Canada Chile Chile Croatia Croatia Cyprus Cyprus Czech Republic Czech Republic Denmark Denmark Estonia Estonia Finland Finland France France Guatemala Guatemala Hungary Hungary Ireland Ireland Israel Israel Italy Italy Japan Japan Latvia Latvia Lithuania Lithuania Malaysia Malaysia Mexico Mexico Netherlands Netherlands New Zealand New Zealand Norway Norway Pakistan Pakistan Panama Panama Poland Poland Peru Peru Romania Romania Scotland Scotland South Arica South Arica Spain Spain Sweden Sweden Switzerland Switzerland Thailand Thailand Turkey Turkey United Kingdom United Kingdom United States United States o America o America

Countries where we can place, and

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National Distribution Channels

Australia

Adelaide Adelaide Gold Coast Gold Coast Bunbury Bunbury Campbelltown Campbelltown Canberra Canberra Dubbo Dubbo Gosord Gosord Hobart Hobart Kalgoorlie Kalgoorlie Kuala Lumpur Kuala Lumpur Mandurah Mandurah Newcastle Newcastle Penrith Penrith Perth Perth Tamworth Tamworth Townsville Townsville Wollongong Wollongong

United States o America

Atlanta Atlanta Austin Austin Baltimore Baltimore Boise Boise Boston Boston Chicago Chicago Columbus Columbus Dallas Dallas Denver Denver Detroit Detroit Fort Worth Fort Worth Houston Houston Las V Las Vegaegass Los Angeles Los Angeles Memphis Memphis New Y

New York ork CityCity Newark Newark Orlando Orlando Philadelphia Philadelphia Phoenix Phoenix Pittsburgh Pittsburgh Salt Lake City Salt Lake City San Francisco San Francisco San Jose San Jose Seattle Seattle Tampa Tampa Washington Washington

United Kingdom

Basildon Basildon Birmingham Birmingham Blackburn Blackburn Blackpool Blackpool Bolton Bolton Bradord Bradord Bristol Bristol Chelmsord Chelmsord Coventry Coventry Derby Derby Dundee Dundee Edinburgh Edinburgh Glasgow Glasgow Gloucester Gloucester Hudderseld Hudderseld Ipswich Ipswich

Kingston upon Hull Kingston upon Hull Leeds Leeds Leicester Leicester Liverpool Liverpool London London Manchester Manchester Newport Newport Norwich Norwich Nottingham Nottingham Oxord Oxord Peterborough Peterborough Plymouth Plymouth Preston Preston Reading Reading Rotherham Rotherham Saint Helens Saint Helens Sheeld Sheeld Swansea Swansea Swindon Swindon Watord Watord

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

National Distribution Channels

New Zealand

Auckland Auckland Christchurch Christchurch Dunedin Wellington Dunedin Wellington

Italy

Bari Bari Bologna Bologna Brescia Brescia Cagliari Cagliari Florence Florence Genova Genova Messina Messina Padova Padova Palermo Palermo Rome Rome Taranto Taranto Torino Torino Verona Verona St. Vincent St. Vincent

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Facts and

Figures

about

Non-Cash

T

rade

According to the World

According to the World TTrade Organization 15% rade Organization 15% o world trade o world trade is conducted on is conducted on a non-cash basisa non-cash basis. . ThisThis includes direct trade, git-culture, counter-trade/reciprocal trade (oten ound

includes direct trade, git-culture, counter-trade/reciprocal trade (oten ound between governments andbetween governments and multi-national organizations) and non-government currencies (community currencies, regional currencies, multi-national organizations) and non-government currencies (community currencies, regional currencies, git vouchers, loy

git vouchers, loyalty points & aalty points & air-points) and is thereore worth approximately USD $2.79 trillion ir-points) and is thereore worth approximately USD $2.79 trillion dollars o dollars o the estimated USD $18.6 trillion

the estimated USD $18.6 trillion dollars o world trade dollars o world trade (2004 W(2004 World Bank gures).orld Bank gures).

More recent gures are currently unavailable but it is known that global trade rose in 2004 by 21% (world More recent gures are currently unavailable but it is known that global trade rose in 2004 by 21% (world merchandise exports rose by 16% to $7.3

merchandise exports rose by 16% to $7.3 trillion, while commercial services ollowed closely with a trillion, while commercial services ollowed closely with a growthgrowth rate o 12% to $1.8 trillion) and it

rate o 12% to $1.8 trillion) and it is estimated that this rise has carried steais estimated that this rise has carried steadily onwards through to 2006,dily onwards through to 2006, making non-cash trade orecast at between $3.37 trillion (2005) and $4.08 trillion (2006).

making non-cash trade orecast at between $3.37 trillion (2005) and $4.08 trillion (2006). The International Reciprocal T

The International Reciprocal Trade Association (IRTA) targets rade Association (IRTA) targets trade credit use trade credit use at 4% at 4% o business spending.o business spending. With business spending making up 10% o the USD $34 trillion dollar economy – utilizing trade is a USD With business spending making up 10% o the USD $34 trillion dollar economy – utilizing trade is a USD $136 billion dollar

$136 billion dollar opportunityopportunity.. •

•Non-cash trade, in one orm or another, accounts or nearly 30 percent o the world’s totalNon-cash trade, in one orm or another, accounts or nearly 30 percent o the world’s total business

business..11

•

•The National Association The National Association o To Trade Exchanges, Trade Exchanges, The International he International Journal o HospitalityJournal o Hospitality Management and the Michigan State University together claim

Management and the Michigan State University together claim that approximatelythat approximately 70% o 70% o all Fortune 500 companies utilize oset trading

all Fortune 500 companies utilize oset trading..22

•

•According to the Association o According to the Association o Advertising Agencies,Advertising Agencies, eight out o ten eight out o ten corporationscorporationsengageengage in excess capacity exchange.

in excess capacity exchange.33

•

•ApproximatelyApproximately65% o all New York Stock Exchange-listed companies65% o all New York Stock Exchange-listed companies engage in excess capacityengage in excess capacity exchange.

exchange.44

•

•In 1994, on the 60th anniversary o theIn 1994, on the 60th anniversary o the SwissSwissWIR excess capacity trade system, annual volumeWIR excess capacity trade system, annual volume in reached 2.5 billion Swiss Francs

in reached 2.5 billion Swiss Francs (over $2 billion US dollars) and boasted 80,000 (over $2 billion US dollars) and boasted 80,000 membersmembers nationally

nationally..55 _{The WIR also enjoys a membership base o}_{The WIR also enjoys a membership base o nearly}_nearly_{20% o all Swiss businesses}_{20% o all Swiss businesses}_{in a}_{in a}

country o only 7 million people. country o only 7 million people.66

•

•At its peak in 2001-2002, an estimated 6 to 10 million Argentines participated in the Red Global deAt its peak in 2001-2002, an estimated 6 to 10 million Argentines participated in the Red Global de T

Trueque local rueque local commodity exchange system, including commodity exchange system, including doctors, manuacturers, and doctors, manuacturers, and even railways,even railways, turning over approximately

turning over approximately 6 billion US dollars per 6 billion US dollars per annum in transactionsannum in transactionsand accounted orand accounted or approximately 15% o

approximately 15% o Argentina’s Argentina’smean personal income.mean personal income.77

•

•According to the According to the International Reciprocal TInternational Reciprocal Trade Association rade Association approximatelyapproximately 400,000 businesses400,000 businesses

engage in ormalised non-cash transactions

engage in ormalised non-cash transactions in the United Statesin the United States..88

11 _{(2004)., Department o Commerce Fact Sheet. USA}_{(2004)., Department o Commerce Fact Sheet. USA DOC.}_DOC.

22 _{Schmidgall, R.S., Damiti}_{Schmidgall, R.S., Damitio, J.W. (1999)., Barteri}_{o, J.W. (1999)., Bartering activities o}_{ng activities o the Fortune 500 and}_{the Fortune 500 and hospitality lodging rms.,}_{hospitality lodging rms.,}

Michigan State University, International Journal o

Michigan State University, International Journal o Hospitality ManagementHospitality Management

33 _{American Association o Advertising Agencies. (2003).}_{American Association o Advertising Agencies. (2003).}

44 _{(2004)., Annual Report, National Association o Trade Exchanges}_{(2004)., Annual Report, National Association o Trade Exchanges}

(12)



The Process

1. Analyse your existing expenses

Review your current budget and look or expenses that you may be able to substitute or goods o

Review your current budget and look or expenses that you may be able to substitute or goods o r serv-r serv-ices acquired through the Ormita Non-Prot Donation Program.

ices acquired through the Ormita Non-Prot Donation Program. Make a list o these expenses along

Make a list o these expenses along with specics (i.e. photocopier toner or a Minolta SCX-1010, 500with specics (i.e. photocopier toner or a Minolta SCX-1010, 500 single person tents o any color etc).

single person tents o any color etc).

2. Brainstorm

a

list

o

“wants”

Write down all o the things you would like to acquire i you had access to

Write down all o the things you would like to acquire i you had access to additional unds.additional unds.

3. Calculate the value total o what you need

Add your “n

Add your “needs” eeds” and and “wants” “wants” together and together and calculate the calculate the rough value rough value o these o these products and products and services atservices at ull market value.

ull market value.

Remember – everything you want can be yours.

Remember – everything you want can be yours.The beauty o the Ormita Non-Prot Donor ProgramThe beauty o the Ormita Non-Prot Donor Program is that

is that you do not need to source any o the things you want directly rom companies you do not need to source any o the things you want directly rom companies – all you need– all you need to do is locate products and services which other non-prots or businesses may be interested in to do is locate products and services which other non-prots or businesses may be interested in trad-ing. In return, they may acquire goods and services you need and

ing. In return, they may acquire goods and services you need and trade them back to trade them back to you.you. By working together

By working together to acquire a to acquire a large range large range o o “promised” “promised” goods and servicesgoods and services, non-prot organiza-, non-prot organiza-tions can exchange these gits with one another on a non-cash basis a

tions can exchange these gits with one another on a non-cash basis a nd ull their needs.nd ull their needs.

No delivery needs to take place until a “buy” or “sell” has occurred and, in most cases, the donor will No delivery needs to take place until a “buy” or “sell” has occurred and, in most cases, the donor will arrange delivery ree o

arrange delivery ree o charge. (Where this does not occur the charge. (Where this does not occur the recipient may have to pay their ownrecipient may have to pay their own reight costs.)

reight costs.)

4. Research existing and potential donors

Any business who supports your current activities is

Any business who supports your current activities is a great potential a great potential donor. Use the internet, phonedonor. Use the internet, phone book and connections established

book and connections established by your volunteers and identiy those organizations that may haveby your volunteers and identiy those organizations that may have surplus products or

surplus products or time, brand power, and most importantly, similar values and mission as time, brand power, and most importantly, similar values and mission as your group.your group. Y

Your donors should our donors should support your aims support your aims (they are donating (they are donating toto your yourcharity even though the product charity even though the product maymay end up somewhere else).

end up somewhere else).

Once you have identied these organizations - research them. It is

Once you have identied these organizations - research them. It is important to understand how theyimportant to understand how they operate and who to talk to

operate and who to talk to i you wish to solicit an in-kind donation.i you wish to solicit an in-kind donation. It is always important to remember:

It is always important to remember: while Heinz Foods may be the perect while Heinz Foods may be the perect group to supply you a par-group to supply you a par-ticular product you need directly

ticular product you need directly, i it is not local then you are better o, i it is not local then you are better o talking to businesses who you talking to businesses who you can access easily and then

can access easily and then trade their product using Ormita trade their product using Ormita or other goods or other goods and services you need. and services you need. TheThe benet to the donor is the same

benet to the donor is the same – and you receive even greater access to donated products and services– and you receive even greater access to donated products and services than beore. Every non-prot

than beore. Every non-prot is eectively is eectively “pitching in” “pitching in” to grow to grow the pool othe pool o available goods and  available goods and servicesservices or one another.

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5. Meet with potential donors

Contact the organization and

Contact the organization and schedule a meeting with their schedule a meeting with their owner, puowner, public aairs executive or ablic aairs executive or a manager with decision-making power. Explain to the individual the nature o

manager with decision-making power. Explain to the individual the nature o the conversationthe conversation you would like to have – to

you would like to have – to discuss options or in-kind donations discuss options or in-kind donations which, in turn, will generatewhich, in turn, will generate publicity or them, increase their sta moral, boost their brand image and recover lost income publicity or them, increase their sta moral, boost their brand image and recover lost income by turning it into a tax deduction.

by turning it into a tax deduction. I a donor is local in

I a donor is local in several markets but not present in others, there may be an additional benetseveral markets but not present in others, there may be an additional benet or them to have their product traded into another country where they are looking to gain market or them to have their product traded into another country where they are looking to gain market exposure.

exposure.

Ormita has a donor product brochure and power-point presentation which you are able to Ormita has a donor product brochure and power-point presentation which you are able to customize or your own use when visiting with potential donors.

customize or your own use when visiting with potential donors.

6. Analyse their needs

•

•Clearing surplus stock (in some Clearing surplus stock (in some instances donating is cheaper than destroying surplus products)instances donating is cheaper than destroying surplus products) •

•Corporate Social Responsibility requirementsCorporate Social Responsibility requirements •

•Create positive publicityCreate positive publicity •

•Entry into oreign marketsEntry into oreign markets •

•Increase brand awarenessIncrease brand awareness •

•Moving warehousesMoving warehouses •

•TTaking seasonal aking seasonal products o-marketproducts o-market •

•Tax benetsTax benets •

•TTrialling new rialling new products o-marketproducts o-market

7. Submit your request

Customize the

Customize the Sample In-Kind Donation Solicitation Sample In-Kind Donation Solicitation Letter provided in Letter provided in the Ormita Tthe Ormita Toolkit and oolkit and deliverdeliver the letter and accompanying materials to the appropriate decision-maker in the organization.

the letter and accompanying materials to the appropriate decision-maker in the organization.

Give the organization reasonable time to review and approve the donation request and to negotiate the Give the organization reasonable time to review and approve the donation request and to negotiate the acknowledgements they want in exchange.

acknowledgements they want in exchange.

Follow-up the letter with a personal visit or telephone call. Follow-up the letter with a personal visit or telephone call.

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3

8. Fill out the In-Kind

Donation Form

Once the organizations has

Once the organizations has conrmed that they are interested in conrmed that they are interested in donating, have them complete andonating, have them complete an

In-Kind Donation Form In-Kind Donation Form.. This orm is

This orm is an an “oer to “oer to supply” supply” only and is only and is subject to subject to another charity or another charity or organization wishing to organization wishing to taketake the oered goods or services.

the oered goods or services. Send this orm into Ormita. Send this orm into Ormita.

9. Ormita will market the donation

and, in return, nd you what you need

Ormita will market the donation to other organizations at

Ormita will market the donation to other organizations at ull-retail value.ull-retail value.

Once the donation has been accepted, Ormita will arrange the logistics o reight a

Once the donation has been accepted, Ormita will arrange the logistics o reight a nd ullment onnd ullment on your behal.

your behal. Y

You will now receive credit to ou will now receive credit to acquire goods and services rom acquire goods and services rom other non-prots – and businessesother non-prots – and businesses – within the Ormita commerce network.

– within the Ormita commerce network. Y

You can access products online, in our ou can access products online, in our weekly newsletter or directly rom your assigned weekly newsletter or directly rom your assigned Broker.Broker.

The entire process ro

The entire process rom receiving donation m receiving donation “oers” “oers” through to settlethrough to settlement and acquisition oment and acquisition o your own your own goods and services may range rom 10 – 90 days.

goods and services may range rom 10 – 90 days.

P

Patience is a atience is a virtue. As more businesses and non-prot organizations virtue. As more businesses and non-prot organizations participate in the programme, moreparticipate in the programme, more oerings will become available and the

oerings will become available and the process will become aster.process will become aster.

Accounting or the

Accounting or the value o donated value o donated goods and services goods and services is done on is done on a a “ull market value” “ull market value” basis. Where a do-basis. Where a do-nated product is slow to

nated product is slow to move, there may be a need or move, there may be a need or a discount to speed a discount to speed up the process. Tup the process. This is entirelyhis is entirely up to you.

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Roles and Responsibilities

Non-Prot Organizations Responsibilities

•

•Familiarize its employees and volunteers with the eatures Familiarize its employees and volunteers with the eatures and benets o the and benets o the Ormita In-KindOrmita In-Kind Donation service.

Donation service. •

•Issue a joint-press-release about Issue a joint-press-release about the partnership.the partnership. •

•Publish inormation about Ormita in its newsletter at least Publish inormation about Ormita in its newsletter at least once every 12 months.once every 12 months. •

•Identiy suitable donors and speak to them directly about giving in-kind donations to your organi-Identiy suitable donors and speak to them directly about giving in-kind donations to your organi-zation.

zation. •

•Have them ll out an In-Kind Donation Form .Have them ll out an In-Kind Donation Form . •

•Where you have talked directly to them about how you will Where you have talked directly to them about how you will handle the donation process: submithandle the donation process: submit the completed In-Kind Donation Form to Ormita.

the completed In-Kind Donation Form to Ormita. •

•Monitor your account online and, once the donation Monitor your account online and, once the donation is sold to is sold to another organization, access theanother organization, access the credits received rom the sale to acquire your own needed goods and services.

credits received rom the sale to acquire your own needed goods and services.

Ormita Responsibilities

•

•Provide Non-Prot Organizations with sales and marketing material to assist with the promotionProvide Non-Prot Organizations with sales and marketing material to assist with the promotion o the In-Kind Donation Program to their donors.

o the In-Kind Donation Program to their donors. •

•Provide training material to Provide training material to educate their employees and volunteers regarding the Ormita rangeeducate their employees and volunteers regarding the Ormita range o solutions.

o solutions. •

•Issue joint press releases about the organization joining the Issue joint press releases about the organization joining the program and the benets o the In-program and the benets o the In-Kind Donation Program.

Kind Donation Program. •

•Handle all aspects o Handle all aspects o the exchange process, including marketing the donated goods the exchange process, including marketing the donated goods received toreceived to other members o

other members o Ormita, crediting your donor account and helping you acquire other Ormita, crediting your donor account and helping you acquire other oeredoered needed products and services in return.

needed products and services in return. •

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5

Marketing Support

All Ormita Non-Prot Organizations are backed by wide-ranging resources available through Ormita’s sales and marketing support teams.

Sales Support

I required, the Ormita sales orce can work with the organization to capitalize on in-kind donation

opportunities, including in participating in joint sales calls. To make a sales call booking email

a[email protected] call your assigned Client Director.

Marketing Material

Ormita will provide the organization with access to our online Marketing Library which contains a range o valuable materials to help promote in-kind giving to their donors. Material includes sales presentations, solutions bries, brochures and case studies.

Newsletter

Ormita keeps its non-prot partners up-to-date with news about goods and services that are available through e-mail newsletters.

Online Trading

Non-Prot Organizations can buy and sell online, request pricing, check their account balance, change their details, manage sub-accounts, transer credits and more.

24x7 Telephone Support

Ormita oers 24x7 telephone support to help each o our non-prot partners nd what they are looking or in an emergency.

Training

Ormita knows that the best trained and best prepared partners achieve greater success. Ormita has invested in eective education and training resources which it provides to its partners.

Logo Usage

Approved organizations may use the Ormita logo to promote their association with Ormita. Please see theOrmita Corporate Brand Manualor the rules governing the use o our logo.

Public Relations Support

When a key transaction is successully closed, Ormita works with the organization and the customer to spread the word.

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November 12, 2007 November 12, 2007

Beyond the Gift of Cold, Hard

Beyond the Gift of Cold, Hard Cash

Cash

By Deborah L. Jacobs By Deborah L. Jacobs

AMONG the items that Tom Bird gave to charity last year was

AMONG the items that Tom Bird gave to charity last year was what he considered a “lingering asset” on his what he considered a “lingering asset” on his personalpersonal balance sheet: the domain name, farm.com,

balance sheet: the domain name, farm.com, which he retained when he and which he retained when he and his business partner sold their Silicon Vhis business partner sold their Silicon Valleyalley record storage company, First American Record Management (FARM) in 1999.

record storage company, First American Record Management (FARM) in 1999. Sensing a ready market for

Sensing a ready market for the dormant address, Mr. Bird, who is now a the dormant address, Mr. Bird, who is now a venture capitalist, approached the Boston Foun-venture capitalist, approached the Boston Foun-dation about taking it. The charity readily agreed, and within a

dation about taking it. The charity readily agreed, and within a month sold it for $200,000. Mr. Bird got a month sold it for $200,000. Mr. Bird got a correspond- correspond-ing tax write-off for his donation, which had cost him

ing tax write-off for his donation, which had cost him nothing but a nominal registration fee 18 years earlier nothing but a nominal registration fee 18 years earlier and annualand annual renewal fees.

renewal fees.

The contribution is one example of how innovative donors and open-minded charities are

The contribution is one example of how innovative donors and open-minded charities are moving beyond traditional giftsmoving beyond traditional gifts of cash and marketable securities and beneting from

of cash and marketable securities and beneting from donations of noncash assets. Althdonations of noncash assets. Although real estate remains the mostough real estate remains the most popular type of noncash gift, charities have also accepted

popular type of noncash gift, charities have also accepted tangible personal property like art, jewellery and collectibles,tangible personal property like art, jewellery and collectibles, and intangible assets like patents or shares in a

and intangible assets like patents or shares in a closely held business.closely held business. Statistics are scarce, but Ruben D.

Statistics are scarce, but Ruben D. Orduña, vice president of the Boston Foundation, said that most Orduña, vice president of the Boston Foundation, said that most of the organization’of the organization’ss larger gifts last year included a noncash asset.

larger gifts last year included a noncash asset. “Often the kinds of assets that wealthy people have

“Often the kinds of assets that wealthy people have available to donate are things other than cash available to donate are things other than cash and marketable securi-and marketable securi-ties,” Mr. Orduña said.

ties,” Mr. Orduña said.

Such donations require donors to navigate potential tax traps, have the

Such donations require donors to navigate potential tax traps, have the property appraised, and nd an appreciativeproperty appraised, and nd an appreciative recipient who will most often sell the asset.

recipient who will most often sell the asset. But for those who make But for those who make the effort, it provides an alternative to checkbook the effort, it provides an alternative to checkbook philanthropy and a way to still give regardless of

philanthropy and a way to still give regardless of stock market performance.stock market performance. Bryan Clontz, president of Charitable Solutions, a Jacksonville, Fla., rm

Bryan Clontz, president of Charitable Solutions, a Jacksonville, Fla., rm that helps charities liquidate noncash assets,that helps charities liquidate noncash assets, said he got more calls

said he got more calls about these types of donations when the market was about these types of donations when the market was down.down. As with publicly traded securities, there are tax

As with publicly traded securities, there are tax incentives for the donor to make incentives for the donor to make gifts of property that has gone up gifts of property that has gone up inin value, said Ralph E. Lerner, a lawyer with Sidley Austin Brown & Wood, in New York.

value, said Ralph E. Lerner, a lawyer with Sidley Austin Brown & Wood, in New York. One is the savings in long-term capital gains tax,

One is the savings in long-term capital gains tax, which is 15 percent for which is 15 percent for sales of appreciated business interests and realsales of appreciated business interests and real estate held at least 12 m

estate held at least 12 months, and 28 percent for tangible personal property like art onths, and 28 percent for tangible personal property like art and collectibles. Since the charity isand collectibles. Since the charity is tax exempt, it generally pays no

tax exempt, it generally pays no tax when it sells the asset. tax when it sells the asset. In the best-case scenario, you can In the best-case scenario, you can also deduct the fair-mar-also deduct the fair-mar-ket value of the asset

ket value of the asset at the time of at the time of the donation, rather than what you paid the donation, rather than what you paid for it. When making gifts to a for it. When making gifts to a public charitypublic charity,, donors are entitled to a deduction for

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7

Any deduction that can’t be taken in the year of the donation — say, because the donor’s income isn’t high enough

— can be carried forward up to ve years. Alistair Barnes, a property manager with Global Special Risks in Houston, gures that his donation of a 3 percent share in the company, a privately held insurance rm, two months before its May

2007 sale, will entitle him to a $292,000 deduction in April. For tangible personal property, something you can touch and move, a restriction known as the related-use rule applies.

For your donation to qualify for a full fair-market value deduction, the charity must use the asset in a way that is related to its exempt purpose, said Conrad Teitell, a lawyer with Cummings & Lockwood in Stamford, Conn. Otherwise, your income-tax deduction is limited to your basis in the asset (what it initially cost you) or its fair market value, whichever is less.

The related-use rule is not a problem for gifts of art to a museum with similar works in its collection, but it affects other

types of gifts to institutions that plan to convert them to cash. Some clients are surprised to nd themselves constrained

by this rule when they donate items to be auctioned at the annual church or school bazaar, said Laura Peebles, a director with Deloitte & Touche in Washington.

Gifts of real estate are not subject to the related-use rule. One of the more unusual ones was a tandem crypt donated to

the University of California at Los Angeles. Situated at Westwood Memorial Park, a cemetery where many Hollywood stars are buried, the crypt was near Marilyn Monroe’s grave, said Judith Pillon, director of the ofce of gift planning at

U.C.L.A. The university sold it to someone in the entertainment industry for $100,000, Ms. Pillon said.

There are many ways to contribute real estate and reap large tax benets, but these donations carry complications of their

own, said David T. Leibell, a lawyer with Wiggin and Dana in Stamford, Conn. Most charities prefer that the property

not be mortgaged because it can run afoul of various tax law restrictions. Moreover, the nonprot, as if it were buying

the property, must check for liens and be sure there are no environmental hazards that would require cleanup obligations under federal law.

Charities are not bashful about looking a gift horse in the mouth. Jane Wilton, the general counsel of the New York Community Trust, said that one time the group declined a gift of a Brooklyn gas station because it was concerned about environmental hazards.

(19)

8

AUSTRALIA

AUSTRALIAN CAPITAL TERRITORY Canberra (02) 6160 1477 NEW SOUTH WALES

Campbelltown (02) 4602 4115 Dubbo (02) 5804 5111 Gosord (02) 4304 1501 Newcastle (02) 4016 6127 Penrith (02) 4702 0513 Sydney (02) 8197 7017 Tamworth (02) 5711 1203 QUEENSLAND Brisbane (07) 3121 9657 Gold Coast (07) 3166 5304 Sunshine Coast (07) 5313 3411 Townsville (07) 4795 0409 SOUTH AUSTRALIA Adelaide (08) 7423 0109 TASMANIA Hobart (03) 6281 4775 VICTORIA Melbourne (03) 9095 3402 WESTERN AUSTRALIA Bunbury (08) 9774 0105 Kalgoorlie (08) 9051 5200 Mandurah (08) 9512 8010 Perth (08) 6465 9631

ITALY

Bari 080 214 9618 Bologna 0511 990 7661 Brescia 030 207 7648 Cagliari 070 773 8241 Firenze (Florence) 055 535 7643 Genova 010 893 7302 Messina 090 896 8832 Padova 049 859 7942 Palermo 091 619 3644 St Vincent 016 687 1130 Taranto 099 987 1038 Torino 0111 983 9445 Verona 045 485 8775

ROMANIA

Bucharest (021) 519 1421

UNITED KINGDOM

BBasildon 0126 843 0010 Birmingham 0121 264 0130 Blackburn 0125 441 0010 Blackpool 0125 358 0011 Bolton 0120 423 0001 Bradord 0127 444 9121 Bristol 0117 361 0030 Chelmsord 0124 576 0050 Coventry 0247 699 8602 Derby 0133 291 7004 Dundee 0138 260 5000 Edinburgh 0131 606 0044 Glasgow 0141 421 0051 Gloucester 0145 249 8010 Hudderseld 0148 461 0011 Ipswich 0147 339 5000 Kingston upon Hull 0148 269 0011 Leeds 0113 358 0166 Leicester 0116 330 0033 Liverpool 0151 151 0211 London 0203 355 1381 Manchester 0161 421 0177 Newport 0163 337 0011 Norwich 0160 391 1010 Nottingham 0115 817 0011 Oxord 0186 557 6041 Peterborough 0173 351 7070 Plymouth 0175 239 9006 Preston 0177 221 7010 Reading 0118 331 0020 Rotherham 0170 927 0000 Saint Helens 0174 471 0000 Sheeld 0114 301 0004 Swansea 0179 267 6001 Swindon 0179 329 6077 Watord 0192 337 9010

NEW ZEALAND

NORTH ISLAND Auckland (09) 974 9159 Wellington (04) 974 9061 SOUTH ISLAND Christchurch (03) 974 9041 Dunedin (03) 974 8014

UNITED STATES

OF AMERICA

ARIZONA Phoenix (602) 427 5620 CALIFORNIA Los Angeles (323) 443 0233 San Francisco (415) 358 1808 San Jose (408) 538 0208 COLORADO Denver (303) 997 1666 DISTRICT OF COLUMBIA Washington DC (202) 380 3223 FLORIDA Tampa (813) 200 4844 Orlando (321) 281 3766 GEORGIA Atlanta (678) 298 3210 IDAHO Boise (208) 906 1188 ILLINOIS Chicago (773) 337 4770 MARYLAND Baltimore (443) 692 0121 MASSACHUSETTS Boston (857) 524 5135 MICHIGAN Detroit (313) 733 2939 NEVADA Las Vegas (702) 446 0899 NEW JERSEY Newark (973) 741 6884 NEW YORK New York (347) 527 7677 OHIO Columbus (614) 754 5884 PENNSYLVANIA Philadelphia (215) 695 3040 Pittsburgh (412) 360 8450 TENNESSEE Memphis (901) 328 7278 TEXAS Austin (512) 499 2345 Dallas (214) 461 4818 Fort Worth (817) 439 6909 Houston (713) 820 9464 UTAH

Salt Lake City (801) 618 0488 WASHINGTON Seattle (206) 691 8191

HEADQUARTERS

AUSTRALIA PO Box 638 Booval, QLD, 4304 Facsimile: (07) 3123 5908 Email: [email protected] NEW ZEALAND PO Box 132009 Sylvia Park, Auckland Facsimile: (028) 890 637 Email: [email protected] UNITED STATES PO Box 16120 Pittsburgh, PA, 15242 U.S.A Facsimile: (412) 360 8403 Email: [email protected]