Is Cash Still King?

Aug 4, 2014 1:00 PM ET

"If you give a man a fish, you feed him for a day. If you teach a man to fish, you feed him for a lifetime."

While there is some discussion on the origin of this quote, it is generally attributed to Lao Tzu, the Chinese founder of Taoism, in the 4th Century BC. Regardless of who said it, I believe it is a good rule of thumb.

In looking at the 2014 ACCP Trend Report, captains of industry are adopting this mantra. And one could, and perhaps should, argue that is a good thing.

The Trend Report shows that while cash donations are flat or marginally rising, in-kind donations are being significantly increased. In reading other reports on giving, all show very similar results. Some nonprofit leaders have weighed in on this with the lament that, while in-kind donations are appreciated, what they really want is cash.

I understand that sentiment. You can’t pay the rent, or the light bill or your employees with an in-kind contribution. However, I would offer an alternative world view. While recognizing there will always be a need for hard cash donations, there are times when the potential for in-kind donations will enable a nonprofit to do more good than would a cash donation.

The examples of this are many, and most, if not all of you reading this can certainly cite examples from your own programs.  At the end of the day the reality of it is, nonprofits that are embracing this new reality and finding ways to truly multiply the impact of an in-kind donation are the organizations that are doing the most good for the problem that they are charged to solve.

Hypothetical example: A company makes a $10,000 donation and with that donation the nonprofit feeds 10,000 people a turkey dinner on Thanksgiving. That’s wonderful. However, what if that same company loaned the nonprofit organization a marketing executive for a month. During that time, the marketing exec restructured the nonprofit’s outreach program, helped them implement a social media policy and gave them a marketing plan that they could then follow for the entire year.  As a result of this improved strategy and expanded capacity, the nonprofit increased their donor base by 20% resulting in a 10% increase in overall annual donations. Let’s say the nonprofit’s annual donations were $500,000. The value of the company’s donation, while measured by the company in the value of the executive’s salary, might still be that $10,000. The value that the nonprofit received was, in this scenario, $50,000. Instead of 10,000 individual meals at Thanksgiving, there are 50,000. And that donation of time and expertise will likely reap benefits for years to come.

So, what does this mean to you? How you do determine whether a cash or an in-kind donation will have the greatest impact? Is it important to offer your company’s employees volunteer opportunities? How can you maximize the skill sets your employees have to the benefit of a cause you are supporting? Are there times when you need to say no to a cash request and offer an in-kind donation instead? Do you have a metrics to help you make that call? All challenging questions and I hope you will discuss your answers with each other on LinkedIn.

Mark Shamley
President & CEO