Last modified: Tuesday, January 24, 2012
New research proves the business case for product philanthropy
Researchers at Indiana University conclude that giving corporate product donations is economically superior to liquidation or disposal
FOR IMMEDIATE RELATE
Jan. 24, 2012
BLOOMINGTON, Ind. -- New research from Indiana University concludes that businesses can do well by doing good through product philanthropy.
Donating products to charities helps corporate bottom lines, reduces waste in landfills and provides relief for people in need. With a record number of Americans living in poverty today, product donations allow people to use their limited resources to pay for food, health care, prescription drugs, utilities and other vital needs.
The study, released today by Indiana University's School of Public and Environmental Affairs, provides the first detailed examination of the return on investment for donating merchandise as opposed to liquidating or destroying it.
"This research demonstrates that donating products can result in substantial financial and social benefits for minimal cost and risk," said Justin Ross, assistant professor of public finance and economics and the lead researcher for this study. "Additionally, working with a nonprofit that can match companies with charities lowers corporate costs associated with product philanthropy."
Good360, a nonprofit that has worked in product giving for almost 30 years, approached SPEA last year do the study. As many retailers and other companies approach the end of their fiscal years on Jan. 31, the research provides new and timely information to help them make good decisions about their excess and slow-moving merchandise.
Additional findings include:
- Product giving presents a considerable financial advantage over cash donations because it can carry an enhanced tax deduction.
- Product donations can provide the same image-enhancement benefits as marketing and advertising programs and at a lower cost.
- Companies that engage in product philanthropy avoid fees and negative branding implications associated with disposal of excess inventory.
- Product donation is superior to liquidation in most circumstances, and the report provides a rule of thumb for companies wishing to make quick cost comparisons.
In addition to providing an economic justification for retailers, manufacturers and distributors to donate excess merchandise, the report gives managers a framework for analyzing the costs, benefits, risks and opportunities of implementing a product philanthropy program.
"We hope that the report will inspire more companies to consider product donation as a viable alternative to liquidation or disposal," said Cindy Hallberlin, president and CEO of Good360, the nation's nonprofit leader in product philanthropy. "For many there is an untapped strategic opportunity to use product giving to advance the business and have substantial social impact on the communities and causes about which they care deeply. Rarely is there such a win-win between business and social good."
For more information on the research collaboration and links to research findings, please visit about.good360.org/productdonationresearch. For those interested in hearing more about this new research, SPEA and Good360 will host a webinar at 2 p.m. today, Jan. 24, to present key findings and answer questions. Space is limited. Please register at www1.gotomeeting.com/register/684724881.
Indiana University's SPEA is a world leader in public and environmental affairs and is the largest school of public administration and public policy in the United States. In the 2009 "Best Graduate Schools" by U.S. News & World Report, SPEA ranks second and is the nation's highest-ranked professional graduate program in public affairs at a public institution. Six of its specialty programs are ranked in the top 10 listings. SPEA's doctoral programs in public affairs and public policy are ranked by the National Academy of Science as the best in the country.
Good360, formerly Gifts In Kind International, is the world's leading nonprofit in product philanthropy and is ranked as one of the top 10 most efficient charities by Forbes magazine. Working with many of the nation's top retailers and brands, Good360 provides needed products to more than 23,000 qualified nonprofit organizations. Over the past 28 years, Good360 has delivered more than $7 billion of donated products. From retail store donations in thousands of communities to employee product giving programs, Good360 continues to identify new ways to efficiently move resources to the communities that need help most.
In 2010, the IU School of Public and Environmental Affairs and Good360 worked together on research that analyzed the social and environmental impact of The Framing Hope Product Donation Program, a program that was created by The Home Depot and Good360.