GTF was created as a separate independent company as a result of seeing the need for corporations to utilize donating product as a viable disposition method. Millions of tons of new products are being landfilled and millions in tax savings go un-realized for one or more of the following reasons:
- Lack of knowledge of IRS guidelines
CFO’s, VP of Corporate Tax, and the Director of Corporate Tax in larger retail companies may not have a working knowledge of the specifics of tax incentives for donating excess product to non-profit organizations that is behind the latest IRS 170e3 provision. Companies are likely to be “risk adverse” to taking these added tax benefits even though these added benefits are available.
- Branding Concerns
Fear of protecting the company’s brand or image is also a contributing factor for avoiding donating returned products. Corporations sometimes assume that the donated product would be re-sold in one of the national retail modeled non-profit thrift stores. Donated branded product may conflict with agreements and protocol in the retail channels.
- Out-Dated Corporate Returns Policies
Limited evaluation is directed to determine the optimal disposition methods for returns, manufacturing overruns, and/or defective packaging or products. A simple walk-through of a company’s distribution centers, manufacturing facilities, and retail store locations will often yield variations in this product disposition process. A formal financial evaluation based on disposition options including donating product may yield immediate cost savings.
- Liability and End Destination for Product
Corporate attorneys who are responsible for mitigating risk and limiting the company’s liability may be reluctant to consider donating products to a charity. Chain of Custody documents and other required documentation in the product logistics flow can mitigate the risk for these corporations.