Donation: The Most Strategic Disposition Option for IT Assets
Donation: The Most Strategic Disposition Option for IT Assets
Donating surplus computer equipment to help bridge the "digital divide" makes good business sense, yet it remains an uncommon practice within many corporations due to a variety of concerns. These concerns include data security, environmental liability, software licensing transfers and the need for technical support, among others. With the right approach, however, these barriers can be overcome. Donating unused technology can be the most strategic disposition option available to corporate IT departments.
Corporate donations of used PCs can address a serious problem in our society: digital exclusion. At the end of 2009, 28 million American households did not own a computer. People with computers, Internet access and the skills to use both earn more and are better students, consumers and employees. They're also more involved citizens. They put the commerce in e-commerce while reducing the cost of serving them. In a digital world where pulpwood-based telephone directories and newspapers are endangered species, how will customers find us without Google?
There is tremendous potential for businesses to address this problem by donating a fraction of the 40 million PCs that businesses replace each year (of which, 75 percent are four years old or less, meaning most have plenty of useful life remaining if properly refurbished). Yet only three percent of replaced corporate PCs are donated and, unfortunately, many of those are essentially dumped on charities without proper testing, repairs and legally-licensed software.
Why IT Asset Donation Remains Rare
Donation remains rare for a variety of reasons. Lacking the right approach, such donations are seen as an out-of-pocket expense since the alternative disposition would likely be resale. Donations also pose risks for environmental compliance since enterprise liability is not severed by the change of title at the time of donation. Also, since IT budgets rarely include a line for philanthropy, technology donations are most often ad hoc affairs, limited in scope and quality.
Perhaps most important, technology donations falter because they are not aligned with enterprise strategies for corporate social responsibility (CSR)-a board-level priority for most companies-and are therefore marginal in terms of value returned to the business.
In a recent market survey, 57 percent of responding companies report donating some surplus IT assets to charity. However, the survey also found a majority of responding companies have well-defined CSR policies and goals which are virtually ignored by the well-intentioned donors in IT.
With proper safeguards and procedures, supporting community organizations with technology donations aligns with CSR goals and adds substantial value for the organization.
A Fresh Look at Computer Donation
Every disposition is a trade-off, with real opportunity costs compared to alternatives. When IT professionalizes its procedures to mitigate enterprise compliance risk and integrates technology gifts with enterprise CSR objectives, the business is able to realize quantifiable returns on its investment-a "giving ROI" that far exceeds the potential of any other disposition option.
Nine keys to this success include the need to:
1. Include CSR and marketing departments in donations planning.
When part of enterprise strategy, technology donations can receive budgetary support from these stakeholders. Also, participation in brand-building initiatives provides IT with a new vector for demonstrating its relevancy to the business.
2. Refurbish the hardware to provide a reliable, quality experience.
Donated hardware is a cost to the recipient, not a gift, if it's not in good operating condition. Fully refurbished hardware can be as reliable as new. Achieving CSR objectives requires that the new user be delighted and empowered by the gift. It is also important not to be labeled as an irresponsible company that avoids disposition costs by dumping surplus equipment on charities in the guise of a gift.
3. Include legitimately licensed software.
Software must be included to make a useful gift, but donating companies must be careful not to violate the terms of their software license agreements-which are explicit about the terms of transfer. Microsoft has created the Microsoft Authorized Refurbisher (MAR) program to inexpensively-and legally-relicense Windows operating system and Office software for secondary use. Consider engaging a MAR service provider to install genuine software on donated machines.
4. Donate where the equipment will have the greatest impact.
Historically, some IT donations have failed because companies give the equipment to community organizations that either do not need it or lack the resources to repair, deploy and maintain it. Gifts that go unused due to lack of training or because of malfunction create no value and can potentially hurt the enterprise brand rather than enhancing it. A third party can help target donations. For instance, some companies partner with nonprofits (such as Habitat for Humanity International, for example) to channel customers' donations effectively.
Provide Support or Donate Where Support Is Available
5. Provide support or donate where support is available.
Most IT organizations find it unacceptably disruptive and expensive to directly support the beneficiaries of their gifts. To address the issue, consider targeting donations to nonprofit organizations with the means to provide training and tech support to individual recipients. Or manage donations through a vendor who includes a warranty and support with its donations services offering. For computers upgraded through the MAR program, Microsoft provides free online technical support and software updates.
6. Track and report results.
A sustainable donations initiative relies on good metrics to provide ongoing proof of its value. Collaborate with CSR and marketing to understand what data they will require to credit IT for their contribution to larger enterprise objectives. For fully depreciated equipment, no additional reporting is necessary for tax accounting.
7. Close the loop.
All good hardware will come to an end, so it is important to provide donation recipients with the means to properly recycle their gifts. Since federal and many state environmental regulations are "joint and several" in establishing liabilities, a user that improperly disposes of an asset poses a risk to the enterprise that made the original donation. Providing free takeback for recycling demonstrates due diligence to regulatory authorities, virtually eliminating end-of-life risks.
8. Keep donating.
Organizations that are able to measure the business value of their gifts make donations part of a diversified strategy for optimizing the value of their hardware investment. From the charity's perspective, recurring support is much more valuable than a one-time gift, increasing the impact of corporate giving.
9. Consider outsourcing the donations process.
Most IT organizations would agree that their core competencies do not include refurbishing hardware, relicensing software, providing families with training and technical support, or managing end-of-life takebacks. Therefore, a managed donations program is the ideal activity to outsource to a qualified services provider. Look for a vendor who is both a MAR and an independently certified recycler. Insist that they have a strong balance sheet and a history of successfully managing the end-to-end process.
This approach is causing organizations to rethink past opposition to donations. For instance, analysts Rob Schafer and Frances O'Brien recently commented in a research note that their organization "has long advised enterprises to be cautious when donating used IT equipment to charitable organizations because the process can be labor-intensive and requires careful planning, asset preparation and documentation." However, the research note points out that with proper precautions, these "relatively low-risk IT asset donations can be attractive to an enterprise's corporate social responsibility (CSR) area."
Because IT is a gateway to
individual prosperity and participation in modern society, donating used PCs to
bridge the "digital divide" can make a major impact. Companies benefit in many
ways when more people are empowered as citizens and consumers through digital
services. From this perspective, corporate surplus IT is a strategic asset
unlike any other kind of surplus property.
Robert Houghton is founder and president of Redemtech. Robert is an expert in the field of technology reuse and recycling, including responsible e-waste management, sustainable computing and off-network security best practices. He can be reached at firstname.lastname@example.org.