However trendy or urgent sustainability may seem these days, it’s certainly not a new concept. The rhyme “Use it up, wear it out, make it do or do without” seems to have first appeared during World War I, and it became widely known as the theme of a marketing campaign intended to make rationing more palatable during World War II. In between the two conflicts came the Great Depression, with a whole generation weaned on scarcity and the need to repurpose everything in order for families to survive.
Thus, we shouldn’t be too surprised to learn that not-for-profit organizations dedicated to finding appreciative new homes for overstocked goods have been around for quite a few decades now. In New York City in the early 1980s, the Department of Cultural Affairs took over a vacant warehouse in Astoria, filled it with used furnishings and surplus materials donated by local businesses in exchange for a tax write-off and invited local artists and arts organizations to come in and help themselves. That program, Materials for the Arts, is still in existence.
Even older than that, and broader in its reach, is an Illinois-based charity called the National Association for the Exchange of Industrial Resources (NAEIR). Founded in 1977, it’s the largest gifts-in-kind not-for-profit in the US. On a membership basis, schools, churches and not-for-profit organizations across the country can choose from an extensive catalogue of free products, all donated by manufacturers. All the members need pay for are shipping and a small processing/handling charge. It’s a dream come true for teachers who need to provide resources for their classrooms when school district budgets grow lean.
For manufacturers, NAEIR is a welcome option when it comes time to clear out merchandise that isn’t selling as well as initially projected. Under section IRC 170 (e) (3) of the US tax code, deductions are equal to the cost of the donated goods plus half the difference between the cost and fair market price, not to exceed twice the cost. That makes gifts-in-kind donations more lucrative and less laborious than liquidating, auctioning or deeply discounting excess inventory. More than $3 billion in products have been donated to NAEIR by more than 8,000 US corporations since its founding.
One manufacturer in our region, Paper House Productions, has cultivated a 22-year relationship with NAEIR, donating more than $13,000,000 worth of goods over the decades. The Saugerties company got its start making artsy die-cut note cards, but gradually branched out into stickers, magnets, journals, planners, scrapbooking supplies, crafting supplies, mouse pads and other printed specialties. Many of these materials, particularly the Playhouse line, are highly useful in the classroom. “Their members love our products,” says Paper House vice president Amy Hernandez-Metcalf, who characterizes the company’s wares as “not need-to-have, but nice-to-have.”
Nearly half of that total — a $6,000,000 shipment, more than 40 double-stacked pallets filling three trucks — was sent off to NAEIR’s warehouse this autumn for free redistribution. While part of the massive donation was prompted by a sales slump caused by Covid-19, “We actually planned on doing it before the pandemic year,” Hernandez-Metcalf reports.
The closure, temporary or permanent, of many stationery and gift stores that are regular Paper House buyers and the inability of sales representatives to do their usual rounds to retailers and trade shows led the company to try some innovative marketing initiatives this year, including Zoom pitches. To compensate for a marked drop in wholesale traffic, Paper House created a new retail-oriented website featuring a Bargain Page, Hernandez-Metcalf says. “We started doing dollar sales online…We offered much lower retail prices than in the past. Word got around.”
While the company has been working on diversifying its income streams and has found a whole new class of clients in 2020, not everything is going to sell, even at deep-discount prices. And due to the pandemic, demand has shifted to materials that can be used for home-based hobbies, so warehouse shelves must be cleared to accommodate product lines that are becoming more popular. “We’re bringing in more puzzles. Puzzles take up a lot more space,” she notes.
Not-for-profit organizations across America, and especially classrooms that haven’t gone entirely virtual, are the beneficiaries of these changing winds of market demand. To learn more about how NAEIR works and how to sign up to place orders, visit www.naeir.org. To view Paper House Productions’ current product lines, visit https://paperhouseproductions.com.