This three-part series concludes with a look at the last link in the donation process – the nonprofit reuse organization.
I believe nonprofits that receive donations of salvaged reusable building materials have an obligation to their donors, and to one another, to refuse materials from donors whose appraisers improperly value materials and charge outrageous prices for their fluffed-up, hundred-plus page reports. Furthermore, they should never accept damaged, non-reusable materials just to keep the donor’s valuation high.
Even nonprofits sometimes settle for short-term returns just to stay afloat. But doing charitable work does not excuse a company from being properly managed – with integrity, tested systems, trained workers, and responsible officers and managers, all with an eye on the mission – reuse!
I have seen lumber delivered to nationally known charitable reuse stores, only to have the manager discard the lumber due to lack of storage space, while still allowing it to be counted as part of the donor’s tax-deducible donation.
Donors should also beware of receiving organizations that recommend a single appraiser, knowing that the appraiser substantially overvalues donations, and that having the materials accurately appraised might result in no donation at all.
I recently became aware of an organization that uses only real estate appraisers, as if the entire house were being lifted up and donated. What makes this practice particularly egregious is that the organization knows full well only salvaged materials will be donated – not the whole house.
Here’s how to avoid falling prey to unlawful appraisers, shoddy contractors or questionable nonprofits:
• Speak directly with appraisers you are considering for the valuation of your donation. Ask to see a recent appraisal report (names and amounts redacted). Be aware that material comparisons may be largely copied from prior appraisal reports. If you think the fee and/or report size (100 or more pages) are excessive, probe a bit. Remember that the nonprofit should have prepared a detailed inventory with supporting photographs.
• Check up on the capability of deconstruction contractors by talking with at least three of their customers. If possible, visit one of the contractor’s active deconstruction sites.
• Visit the organization designated to receive your donated materials. Examining the quality of materials previously received will help you judge their ability to effectively handle and distribute your materials. Try to have conversations with a couple of recent donors.
IRS reviews of nonprofit organizations and donors are confidential. So, unless you do your own investigation, it will be almost impossible to separate the good guys from the bad.
Plan to undertake your own thoughtful review of appraisers, contractors and receiving nonprofits. You do not want your donation to spark an IRS audit.
If you desire more information, please contact me. TedReiff@TheReUsePeople.org or 510.557.1538.