Product donation basics

Alicia_Schmidt — Mon, 08 Jul 2024 17:44:42 GMT

There are a variety of reasons why our Pledge 1% members have chosen to donate products to nonprofit causes including: social impact; inventory management, environmental responsibility, brand reputation, tax deductions, and employee engagement. But no matter what initially inspired these companies to give, the reality is that donating products is not only good for the world, but also good for business.

The Right Thing to Do

The Smart Thing to Do

• Help bridge the digital divide

Historically, nonprofit, education and community-focused groups have struggled to secure the funding needed to invest in digital infrastructure, pay competitive wages for technical staff, and identify products optimized for their specific operational needs. As a result, they often lag behind for-profit entities in terms of efficiency and innovation and stakeholder experience.

• Environmental stewardship

For consumer goods companies, donating products instead of disposing of them can help reduce waste and minimize the company's environmental footprint. This aligns with growing consumer and regulatory expectations for businesses to adopt sustainable practices.

• Social impact

Technology can be used to solve social problems and drive better service delivery and outcomes for community programs

• Strengthen brand and relationships

Showcase your social impact use case at customer/partner conferences—a proven best practice to demonstrate shared values and boost customer loyalty. Collaborate with partners and peer companies around a common cause.

• Engage and retain employees

Leverage employees to get involved with your Product Pledge to improve employee engagement and attract top talent.

Enable your company to live its values, reinforce its culture, cultivate a sense of pride, and empower employees (and your entire ecosystem) to be part of something bigger.

• Reduce costs with excess inventory donation

Leverage surplus inventory to generate cost savings via tax savings or to meet environmental requirements.

• Drive revenue

Leverage your Product Pledge to cultivate new partnerships with target customers.

Create go-to-market strategies for new verticals (i.e. nonprofits, higher education, government).

Brief overview of 6 types of product pledges

Every company’s product pledge will look different depending on each type of company, but some typical ways to leverage your product include the following:

Photo credit: World Central Kitchen.

Donate or discount your product and/or services

A donation is the gift of your products and/or services to a nonprofit, government, social enterprise, and/or educational services organization. A discount typically represents a reduced price, for example 75% off list price. Some companies start small with a donation to a select few nonprofits and then expand to a much larger program offered to all who are eligible. Some technology companies have a hybrid approach and donate a few licenses up front and then offer deep discounts on additional licenses.

Optimize your product/service for nonprofits

Technology products are often designed for corporate audiences and are not optimized to meet the unique needs of nonprofits. Your product pledge could include an investment of engineering resources to develop the features, functionality, tools/templates, training, and/or services required to enable nonprofits to effectively use your product.

Partner to address an urgent social need or natural disaster

Many Pledge 1% members partner with a specific nonprofit to tackle a pressing social issue or urgent need. Combining the potential of your products with the impact expertise of a nonprofit can drive some truly meaningful results during times of crisis.

Leverage product to fundraise and/or launch a social enterprise

Sometimes companies leverage the sale or revenue from a specific product to trigger nonprofit funding. Others create social enterprises, allocating revenues from specific verticals to fuel future social impact grantmaking.

Directly empower a marginalized community

Rather than offering your product to nonprofits, leverage your product to directly support and/or elevate a target community such as BIPOC entrepreneurs and help them to succeed.

Leverage your product to support the Pledge 1% movement

Build the Pledge 1% movement by integrating frictionless opportunities within your product for customers and partners to become Pledge 1% members. Inspire and empower your ecosystem to join this powerful network of like-minded leaders as well as leverage free value add Pledge 1% resources and community to be a force for good.

Key considerations

The core questions you will need to answer as you create your program are:

What products or services do you have to offer?
Who can benefit most from your product/service (and be able to use it effectively)?
Is your product already optimized to meet the target audience’s needs? What additional product/service support is required by you to set the recipient up for success?
What is your capacity to support the program operationally and financially? How much product/service do you want to donate or discount?
Who is eligible for your program? Will it be open to select organizations or to all?

As you dig deeper into these questions in the rest of this learning path, also consider the following:

Do No Harm

Good intentions alone are not enough. When you donate product to a nonprofit, take the time to consider the staffing/expertise required to manage your donation now and over the long-term. It’s important to make sure the organization you are supporting has the necessary resources to make use of your product donation. For example, if a small nonprofit has no in-house tech expertise, they will most likely struggle to use a product donation that requires complex code and ongoing IT management. Similarly, if you offer a nonprofit excess inventory, they may not have the storage capacity to effectively use or distribute your donation.

“For companies venturing into product donation, it’s key to understand that success is not signing up nonprofits for your technology — it’s ensuring their success with your technology. At Box, we support organizations throughout their lifecycle by pairing pro bono volunteers with organizations, developing training courses and nonprofit resources, surveying, and holding an annual forum with our executives and nonprofit customers for feedback. Ultimately, real success is measured in the outcomes and impact an organization experiences utilizing your technology.”

Lauren Coberly

Director & Head of Social Impact

Be Realistic

It’s OK to start small! Setting up a manageable structure (like 5 discounted licenses) and outsourcing qualification and provisioning can be a good way to get started. Take note of the size and scope of your own company, and be realistic with your time and capacity.

“The first thing I ask early stage companies when they’re getting started on their Product Pledge is ‘Do you have a nonprofit now who’s using your product? What are they using it for?’ This is where you start to demonstrate and validate your product use case for nonprofits. Use them as an early adopter focus group to figure out what they need, and have them co-create with you so you are providing a necessary tool. Stay focused. Your job is to help the segment of customers you can best serve, and do that really really well.”

Naomi Morenzoni

Senior Vice President, Philanthropy

Be Creative

Your product pledge does not need to focus on the specific product or services you sell. Think about how you can donate resources that go into creating your product as well. This may include materials, manufacturing processes, transportation, retail and office spaces, commercial partnerships, team expertise, supply chains, and more. You can also consider tapping into your broader product platform, network, customers, or gig economy workforce to participate and accelerate impact.

We’re not like a lot of companies in that we don’t have traditional goods or products to sell, but millions of people make buying decisions every single day on our platform. There are a lot of ways we can help communities if we are creative. For example, when folks go onto the Yelp app, we’ve created filters like ‘women-owned businesses’ or ‘Black-owned businesses’ to help our customers make values-based decisions. Yelp has a large presence and platform, and by curating lists of businesses, we can spotlight those who need it most.”

Miriam Warren

Board Chair, Yelp Foundation and Chief Diversity Officer at Yelp

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