The simple answer to the chapter headline query is “no.” But bartering can become a supplemental source of income. As Mr. Roarke once said on the popular 1970s TV show: “Welcome to Fantasy Island.” And, as he also wryly conveyed with a hint of premonition, “Be careful what you wish for.”
An old joke goes like this:
A man finds a magical lamp on the beach. He rubs the lamp, and a genie appears and says, “Your wish is my command. What is your single wish?”
The man says, “I wish I were rich!”
The genie replies, “It is done! Congratulations, Rich!”
Yes, be careful what you wish for. If you are a nonprofit organization, finding a magical lamp on the beach may not be everything it’s made out to be. You always look for new and creative ways to encourage donors to contribute. For example, of late, cryptocurrency has entered the realm of tax-deductible donations to charities. How the FTX scandal and other crypto troubles will affect these charitable gifts yet remain to be seen. However, for now, such contributions will continue into the foreseeable future.
An ancient and nonconventional option that presents itself, however, is the use of bartering, which is a system that goes back thousands of years. More recently, when you were a child, you inevitably traded baseball cards or playthings with your friends. Today, there are bartering communities and trading companies that use this method to conduct their everyday business.
To be clear, let’s define terms.
Bartering is simply using something you own in direct exchange for something someone else possesses. Some simple rules accompany bartering goods and services. First, it requires a “double coincidence of wants.” This means both persons or entities who are trading must want what the other one has in exchange. Second, no money is involved in the barter. Third, the environment where bartering thrives is usually in backward and uncivilized societies. Finally, limited areas of exchange make the barter system viable.
The historical basis of bartering extends back to the year 6,000 BCE. Mesopotamian tribes first introduced the concept which was then adopted by the Phoenicians. The Phoenicians bartered for goods with people in cities across the oceans. Then the Babylonians improved on the idea and they exchanged goods for tea, spices, food, weapons and even human skulls. Salt was so valuable that it was used to pay Roman soldiers’ salaries. In the Middle Ages, Europeans bartered furs, perfumes, silks and crafts. Bank-like arrangements facilitated the trading of goods and services during the Big Depression in the United States, leading to a significant comeback.
According to estimates by the International Reciprocal Trade Association (IRTA), it claims the annual volume of bartering is in the 12–14-billion-dollar range. COVID-19 made these trades more prominent as companies bartered as just another means of keeping their businesses going.
A February 22, 2022, story in Forbes magazine gave some concrete examples of bartering,
“… a hotel can trade empty room nights for a $20,000 advertising campaign. While hospitality businesses may be top of mind for barter benefits, the possibilities can be endless. Media companies, from radio stations to marketing firms, can leverage available advertising space to offset other costs. Tenants and landlords can coordinate complex real estate deals and negotiate around rent burden. The list goes on.”
The question is, how can nonprofit organizations benefit from bartering?
A digital company called StepbyStep addresses this in an online story “How a Barter Company Can Help Your Non-Profit Raise Funds.” In the article, it answers the question in part:
“By creating sponsorship packages that you can sell on barter, you can use your barter dollars to purchase trips and items for your live and silent auctions at your events.
Here is an example of a sponsorship you might put up for barter:
500 Barter Dollar Sponsorship for Evening Gala includes:
- 1/2-page ad in the printed program.
- Two VIP tickets to the event.
- Your company logo on all flyers promoting the event.
- Banner ad on our website promoting your company.
- Ad in one of our email newsletters.
- Your logo on all advertising of the event.
If you are able to sell 4-5 of these sponsorships, you can in turn use your barter dollars to purchase some amazing trips (minus airfare, of course).”
The story concludes:
“Utilizing a barter company is a great way for nonprofits to get items for drawings, live and silent auctions and even online auctions.”
Businesses and individuals can barter their goods or services through a professional barter company to exchange real dollars for trade dollars. What this does is enhance buying power opportunities to barter with a myriad of other companies. The advantage for nonprofits is that they, too, can take part in this unique system of trading for items they need. Businesses that purchase trade dollars can give them to nonprofits.
International Monetary Systems (IMS) is probably North America’s largest independent barter network purportedly with over 14,000 trade organizations it counts as members. To benefit nonprofit organizations, it states on its website:
“IMS supports more than 100 different charities across 18 states, including Shriners Hospital for Children, Missing & Exploited Children, Special Olympics, Easter Seals, CURE Childhood Cancer Association, March of Dimes, Salvation Army, and Make-A-Wish Foundation. Those are just a few… There are many opportunities year-round to help these amazing organizations save their vital cash by giving them the gift of IMS trade dollars.”
It is logical to ask about the tax advantages to businesses that donate their trade dollars to nonprofits. On the surface, trade dollars given to a nonprofit would appear to be treated by the IRS in the same fashion as regular dollars. It is best to check with your tax accountant.
The English economist John Maynard Keynes once said: “With the breakdown of the money economy, the practice of international barter is becoming prevalent.” It’s worth a look.
Now, about that Mickey Mantle trading card you have…
Norman B. Gildin is the author of the popular book on nonprofit fundraising “Learn From My Experiences.” He is the President of Strategic Fundraising Group, whose singular mission is to assist nonprofits to raise critical funds for their organization. His website is www.normangildin.com.
