A Nonprofit’s Guide to Managing Donations (and More)
Did you miss the Giving Tuesday momentum? Don’t worry—the season of giving is far from over. It’s still December, which means donations are flowing in, people are more generous, and the mission to create meaningful change is at its peak for nonprofit organizations.
But here’s the challenge: every act of goodwill brings with it the responsibility of managing the influx of resources efficiently. From children's toys to canned food and disaster relief supplies, making sure these donations reach the right hands at the right time is not an easy task.
This is where good inventory management makes a difference. With the right system in place, you’ll be able to track donations, know what’s in stock, where it’s stored, and when it needs to be distributed. Whether you’re running an established nonprofit or just starting out, read on to learn how to better manage your donation items this season!
In this guide, we’ll cover:
- #GivingTuesday and the year-end giving trend
- The basics of nonprofit organizations (NPOs)
- Challenges faced by nonprofits
- Benefits of using smart inventory solutions
- Practical tips for setting up an inventory management system
Going Full Throttle for Year-End Giving
The holiday season isn’t just busy for shoppers and business owners, with events like Black Friday and Cyber Monday. As people check items off their holiday shopping lists, nonprofits have their own spotlight during this time of the year.
Enter Giving Tuesday, a day dedicated to giving back. If you've been managing a nonprofit for a while, you're probably familiar with this special day.
It started as a hashtag project by the 92nd Street Y in New York in 2012 and has been held annually on the Tuesday after Thanksgiving ever since. It has grown into one of the biggest fundraising days in the U.S., with nonprofits using marketing campaigns, donor coordination, and social media to raise funds and collect donations. In 2023, this event raised around $3.1 billion in the U.S. alone.
This year, Giving Tuesday fell on December 3. While it may have already passed, it’s not too late to make the most of the season. In fact, this day only marks the kickoff of the giving season.
According to charitable giving statistics, 30% of annual giving happens in December, with 10% occurring on the last three days of the year. As the year-end season of giving continues, it's the perfect time to prepare your inventory management systems for the surge in donations.
But before we go over the tips for implementing inventory solutions, let’s start with the basics of nonprofits.
The ABCs of Nonprofits
Nonprofit organizations, often referred to as NPOs, are focused on serving socially beneficial and charitable purposes rather than generating profit. Each nonprofit carries a unique mission to address specific societal needs. From providing education and healthcare to advocating for social justice and protecting the environment, these organizations play an important role in creating positive change. Some common types of nonprofits include:
- Charitable groups
- Educational organizations
- Religious groups
- Health and medical foundations
- Arts and culture organizations
- Environment and wildlife groups
- International nonprofits
- Scientific research organizations
Types of Donations Nonprofits Accept
Nonprofits depend on different types of donations to support their work. Some common forms include:
- One-time donations: Considered ‘reactive’ donations, these are typically given in response to an emotional appeal or specific event, like a compelling ad or campaign.
- Recurring donations or funds: Regular contributions made by donors.
- Stock donations: Donors transfer ownership of stock shares to the organization, often for tax benefits.
- Planned gifts: Also called deferred or legacy gifts, these are arranged during the donor's lifetime but fulfilled later, often through a will.
- In-kind donations: Non-monetary contributions such as goods, services, or expertise.
Inventories Nonprofits Typically Track
Given the diversity of missions, nonprofits often manage a wide range of inventory items, such as:
- Food and beverages: Nonperishable items (canned goods and dry goods), perishable goods (fresh produce, diary, meat, etc.), and items with expiration dates that require careful monitoring
- Medical supplies and equipment: Bandages, gloves, syringes, medicines, medical devices, and personal protective equipment (PPE)
- Educational materials: Books, stationery, art supplies, laptops, classroom furniture, and learning materials
- Clothing and personal care items: Hygiene kits, blankets, and various types of clothing
- Furniture and household goods: Beds, mattresses, tables, kitchen appliances, and essential household items
- Toys and gifts: Toys, books, games for children, and gift cards or vouchers
- Animal care supplies: Food, medicines, collars, leashes, bedding, and cages
- Event and fundraising supplies: Materials for galas, auctions, donation drives, brochures, banners, and branded merchandise
- Emergency relief supplies: Water, tarps, flashlights, first aid kits, emergency food rations, and portable shelters
- Office supplies: Paper, pens, printers, and technological devices to support day-to-day operations
Challenges in Nonprofit Inventory Management
Making sure that donations are properly tracked, organized, and distributed to the intended recipients is key to fulfilling the organization’s mission. However, nonprofits face numerous challenges in achieving this goal.
1. Limited Resources
Unlike for-profit organizations, nonprofits often operate with limited resources, hence the need to diversify revenue streams. Due to limited funds, many nonprofits use outdated tools like manual logs, paper-based systems, or spreadsheets to manage inventory.
Old systems make it hard to see inventory in real time, which can lead to problems with tracking stock levels and managing resources. On top of that, limited funding can stop nonprofits from upgrading storage, causing spaces to get overcrowded and making it tough to organize and find items when needed.
2. Manual Processes
Many nonprofits still use manual methods to track inventory, which are time-consuming and prone to mistakes. Errors such as incorrect data entry, miscounted inventory, or mislabeled items can lead to misplaced donations, supply shortages, or overstocking.
Furthermore, since inventory updates are often handled by multiple volunteers, inconsistencies in recordkeeping are common. These errors can slow things down and hurt donor trust if it looks like resources are being mismanaged.
3. Complex Donations and Diverse Inventories
Donated items come in all shapes, sizes, and conditions, making inventory management more challenging. From perishable food items and medical supplies to clothing articles, each type of donation requires specific storage, handling, and tracking methods that further complicates the process.
While one category of items might be in surplus, there could be shortages in another. Moreover, some donated items may not meet quality standards or be immediately usable.
4. Volunteer Turnover
Most nonprofits rely heavily on volunteers to carry out their mission, but volunteer retention remains a significant challenge. In the U.S., the average volunteer retention rate is around 65%, meaning one in three volunteers leave sooner than expected. If you have to train new volunteers more frequently than necessary, then it will affect your team’s productivity.
How can nonprofits retain their volunteers? In a systematic review of volunteer turnover research in 2023 published in the Journal of Organizational Behavior, five factors emerged as the strongest predictors of volunteer turnover after examining the behavior of 55,335 volunteers. These include:
- Regular communication
- Organizational support
- Satisfaction & fulfillment
- Affective commitment
- Leader-member exchange
Since volunteers are the most valuable resource for any nonprofit, focusing on the factors that contribute to their satisfaction can make their experience more rewarding, leading to higher retention rates.
“Listen to your team to better understand their needs and work requirements. Too few nonprofits ask employees what would make their workplace ideal for growth and retention. Even fewer have a true understanding of their employees’ workload. Ask your leaders to periodically write job descriptions so that as work changes, so too can performance expectations and management.
– Linda Goler Blount, Black Women’s Health Imperative
5. Perishable Items and Expiry Dates
Managing items like food and medical supplies that have limited shelf life is a big challenge for nonprofits. Without a proper tracking system in place, these items can expire before reaching beneficiaries, resulting in wasted resources.
Manual inventory methods for these items can be slow and prone to errors, making spoilage more likely. Using modern inventory systems can help by tracking items in real time, including their expiry dates.
6. Seasonal Fluctuations
Donation patterns vary dramatically throughout the year. Nonprofits may see a large increase in donations during the holiday season or after natural disasters, resulting in overcrowded storage and logistical difficulties. At other times, donations can slow down, leading to shortages that affect operations.
To manage these ups and downs, nonprofit groups can implement inventory systems that provide real-time tracking and forecasting for a steady supply of resources year-round.
Modern Inventory Management Tools for Nonprofits: Not a Want, But a Need
Now that we’ve covered the challenges nonprofits face in inventory management, let’s focus on the solution. Using modern, software-based tools like BoxHero can help nonprofits streamline their operations, especially during the year-end giving season. But in what specific ways can they help with your inventory management?
- Time-Saving: It automates repetitive tasks like tracking stock levels and updating records.
- Accuracy: You can track donated items with precision through barcodes. Cloud based synchronization with your team members enables inventory data-sharing across locations.
- Real-time Insights: You can track stock in and stock out quantities, as well as important details like expiration dates, anytime, anywhere
- Volunteer Support and Training: Simple, intuitive interfaces are easy to learn, reducing onboarding time for new volunteers
- Customizability: You can set custom attributes for specific donations (expiration date, size, type, etc.), depending on the needs
BGPworks
Tips for Implementing Inventory Solutions for Your Nonprofit: This Season of Giving and Beyond
Using modern inventory systems isn’t just for the busy holiday season—it’s a year-round necessity to keep your nonprofit running smoothly. Here are some practical tips to help you set up an inventory solution that works for your organization:
▶︎ Take a Look at Your Current Inventory Processes
Start by reviewing how your inventory is currently managed. Are there any pressing issues? These could be misplaced donations, expired items, or even missing records. Spotting these problems will help you figure out where you need to make changes and what features will help your nonprofit the most.
▶︎ Train Staff and Volunteers
Your inventory system is only as effective as the people using it. Choose user-friendly solutions to reduce onboarding time for seasonal or rotating volunteers. Make sure to spend time training everyone so they feel comfortable using the system and can make the most of it.
▶︎ Choose the Right Tools and Features
Pick inventory software that fits your nonprofit. For example, if you’re managing medical supplies or perishable goods, look for a system that tracks expiration dates and other critical details. If you’re handling diverse donations, choose tools with barcode generation and real-time tracking to keep everything organized.
Making Every Act of Generosity Count with BoxHero
Don’t let the holiday rush or year-round inventory challenges get the best of your nonprofit. With BoxHero, you can simplify your inventory management, easily track donations, and make sure every item gets to the people who need it most.
Here’s how our features can help you and your team manage all your inventory:
1. Set Attributes for Easy Categorization
Create custom attributes of the donations for easy tracking. For example, set the type of donation, expiration date (especially for time-sensitive items like food), or the condition of the items—whether they’re new, slightly used, or damaged.
This helps you decide what can be repaired or distributed right away. If your nonprofit handles diverse in-kind donations, you can also set priorities for distribution, like marking items for urgent needs, routine use, or as reserves for future emergencies.
2. Design Your Barcode Labels
With BoxHero, you can generate, label, and print barcodes for your items. Customize your label design by including some of the item attributes or information (such as price, SKU, name, etc.) along with the barcode itself. After designing the template of your barcode labels, you can print and attach them on your items.
3. Take Advantage of the Low Stock Alerts Feature
Low stock alerts are another feature that can be helpful. These alerts notify you when supplies are running low, so you can reach out to potential donors and let them know exactly what you need.
4. Get Detailed Analytics
Most nonprofits share updates on social media and via email to show donors how their contributions are making an impact. With BoxHero’s analytics feature, you can easily view donation trends and patterns. This data is useful for updating your digital channels and increasing your online presence.
The holiday season is a busy time for nonprofits, and BoxHero’s inventory management solution is here to help! Stay on top of your donations with our powerful features and make the most of every generous gift.
