Benefits for Non-Profits Using Trade Exchanges

What Is a Trade Exchange?

A trade exchange is a formal bartering website, much more than the "free" section on Craigslist. Both individuals and companies can exchange items through these sites without money changing hands, though the IRS considers any "profit" (receiving something of greater value) to be taxable income. This makes trade exchanges attractive to charities that could trade items they've received but cannot use to larger firms in exchange for items they do need.

Trade exchanges allow non-profits to benefit economically from physical goods.
Trade exchanges allow non-profits to benefit economically from physical goods. | Source

How do Non-Profits Benefit from Trade Exchanges?

• New income for non-profits using trade exchanges if they trade items they have but cannot use to other parties

Nonprofits can use trade exchanges to offer items they have in exchange for items they need. In some respects, this is a new source of income, since it reduces the amount of money they need to spend.

• Reducing or eliminating the need to sell unwanted donations through a storefront

When unwanted items are donated to a non-profit, they must be stored, moved or sold. The trade exchange permits non-profits to list items they have and trade them with other non-profits for items they do need. Your extra toys can go to an orphanage in exchange for a copier you need. And by swapping products, the need to sell items is reduced.

Unlike selling donated items to for-profit businesses for resale, the "non profit" intent of the donor is realized. Non-profits can use trade exchanges to liquidate unusual donations without finding a buyer or selling it to their usual customer base at a likely loss.

• Reducing the need to hold auctions and fundraisers

By posting lots of items on trade exchanges, non profits can reduce their overhead by listing whole lots for trade. This eliminates the need to list each item individuals on auction sites or manage a brick and mortar store front. For non-profits who run a store, using trade exchanges may allow them to reduce the square footage dedicated to storage by moving more inventory through this second channel.

• A way to get rid of donated junk

An unfortunate effect of the donation bin is the usage of these bins to discard items. The old radiator is scrap, not a valuable item. Yet to someone on the trade exchange, the scrap metal has value. A stack of ancient magazines has no value except to a few collectors or occasional libraries. A paper recycler may be able to remake the material into something new. Recyclers use trade exchanges to get material and supply needed items to the trade exchange. In other cases, nonprofits that collect the materials for recycling can trade items your nonprofit needs for the raw materials.

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