ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Sunday, October 6, 1996 TAG: 9611080001
SECTION: BUSINESS PAGE: 3 EDITION: METRO
DATELINE: NEW YORK
SOURCE: JOHN CUNNIFF ASSOCIATED PRESS
From a Galesburg, Ill., warehouse equal in size to nine football fields there flows each day a cornucopia of brand new items for schools, churches, nursing homes and other nonprofit organizations.
Office supplies, computers, software, tools, toys, games, books, clothing, personal care items, housewares. The variety is as broad as you can imagine. Golf clubs, postcards, dishes, appliances, furnaces and furniture.
Tens of millions of dollars worth each year - $800 million in the past two decades. Free, all of it, except for the cost of a catalog and shipping of the items. One thousand cartons a day, 100 tons a week, all year long.
This is NAEIR, the National Association for the Exchange of Industrial Resources. It is just that - an exchange - accepting items from companies seeking to whittle inventories and sending them on to those who need them.
It is one of those rare gems of commerce, a win-win operation, in which donors obtain a tax deduction (for freeing up space in their attics), while recipients obtain what otherwise they might not be able to afford.
Conceived by Norbert Smith, a former aircraft parts manufacturer and later a consultant, NAEIR's growth rate and success would be the envy of a profit-seeking company. Last year, it shipped goods worth $110,823,453.
Everything moves freely through NAEIR, from Rubbermaid, Gillette, Gateway 2000, Stanley Tools, Thompson-Minwax and the like to more than 7,000 members. Current Inc., a catalog house, once gave more than 200 trailer-loads of items.
As with its corporate contributors, NAEIR itself sometimes must clear its warehouse of slow-to-go items, which it does by holding grab-bags, in which members may load a cart with as much merchandise as they can in one trip.
NAEIR publishes 2,000-item catalogs throughout the year, from which members select items. It's six-catalog program, for example, costs $595, but the not-for-profit members receive on average $2,000 in items per catalog.
Members also pay for shipping costs, generally by United Parcel Service, for the goods they receive, and so do the companies that contribute items. The latter, however, can count shipping costs as a tax deduction.
The tax aspect comes under U.S. Internal Revenue Code Section 170 (e) (3), which allows regular (C) corporations to deduct costs of products donated, plus half the difference between cost and fair selling price. Other companies that under tax law are classified as S corporations, partnerships and sole proprietorships earn a straight cost deduction.
Although more than 5,000 companies have donated to NAEIR, several hundred on a regular basis, the operation remains somewhat unknown. That, however, is in the process of being corrected as the word gets around. NAEIR is at 560 McClure Street, P.O. Box 8076, Galesburg, Ill., 61402-8076.
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