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Children's Hope Fund
Hong Kong Ltd.
Changing Lives: One Child at a Time!

Gifts-in-Kind (GIK) FAQ

1. What are Gifts-in-Kind (GIK)?

Gifts-in-Kind are donated commodities which CHF uses for charitable purposes. The commodities could be something as costly as innovative pharmaceuticals ore fire trucks, or as basic as clothing or bulk pasta or corn. The value of each container´s commodities could range from a few thousand dollars to $10 million or more.

Some organizations are able to handle small quantities of GIK, like perhaps a sofa or a few pieces of clothing. CHF´s focus is on much larger quantities, usually enough to fill out at least a 20´ocean-going freight container.

2. Is GIK important in humanitarian work?

Yes! At times, GIK literally means the difference between life and death. Precious food reaches a famine-stricken nation. Fresh medicines stop an epidemic. Books provide educational opportunities otherwise not available. Vegetable seeds provide food and economic opportunity, while also improving health.

3. How does CHF obtain GIK?

The CHF global family receives most of its GIK from businesses, service groups like Rotary Clubs, churches and other charities or humanitarian organizations.

4. Why from other charities?

Businesses donate GIK the same way individuals donate money: they give to organizations they trust, and who happen to seek the “available surplus” on the day it is available! This means we get goods directly from some businesses, and other charities get goods from their own contacts. We then may considate our efforts for the most efficient way to help our beneficiaries a do a good job for our donors.

5. How does CHF ensure GIK´s quality?

Our policy is to NEVER accept junk. And after being an industry leader in GIK for over 20 years, the CHF “no junk” reputation is well known and respected among our donors, and among the people we help overseas. “Junk” in this context could include expired medicines, unsuitable used clothing broken equipment, outdated textbooks and other items which could prove dangerous, useless, or simply degrading to recipients.

When critical issues such as product safety are involved, our commodities are normally inspected prior to shipment, either by CHF representatives and/or government officials in the receiving country.

6. How does CHF determine what GIK is needed overseas?

We get many requests for GIK, from our existing program partners and also from new organization. All of the requests we honor come from sources (non-profits, service groups, government ministries etc.) which have proven expertise for handling GIK and working successfully within their own culture and legal framework.

We also maintain commodity “pipelines” for emergency disaster supplies, and we keep emergency supplies close at hand virtually year-round in several countries where either natural disasters or humanitarian crises call for immediate aid to be delivered within 24 hours.

7. How do you know CHF´s GIK “really gets to the people who need it”?

All of our GIK is secured through the shipping and distribution process, with protection varying from country to country. Our GIK also enjoys a variety of internationally recognized, legal documents. (including Bills of Lading) so we know our goods are actually shipped, and received. As many as 17 legal, auditable documents may be required for our GIK going.

When GIK reaches the host country, it must clear Customs and is stored until distribution, often under armed guards in heavily secured warehouses.

Our local workers or program partners distribute GIK like such as directly to individuals in need, with all distributions supervised (and often overseen by local police, for security). Medicines are distributed by qualified professional service deliverers to people who need them; we do not give medications directly to individuals.

We then get written field reports, subject to audit, of how goods were distributed, and who received them. We often also get photographs.

When GIK shipments are extremely sensitive, we may send people from a CHF corporate office to oversee distribution and/or perform field audits. Also, we work with staff from other humanitarian organizations to watch over each other's GIK, a cooperative and cost-efficient way to protect all of us form GIK misuse.

8. How is GIK valued?

The CHF uses a strictly defined method known as the "Interagency Standards", first promulgated in 1992 and now followed voluntarily by thousands of humanitarian agencies worldwide. Our chief executive, Joel MacCollam, was one of the Five individuals most involved in developing and promulgating the Standards.

Normally our corporate donors value their GIK for us at Fair Market Value (FMV), defined as wholesale or less, defined as what two reasonable parties might agree to pay, under normal situations, and considering quantity, packaging, impending expiration dates, etc.

CHF then verifies the reported wholesale FMV against other independent sources (catalogs from manufacturers, pharmaceutical handbooks, etc., as well as industry averages-per-pound for bulk used clothing, etc.). We will also lower the GIK value even further if, for example, the packaging is damaged or the product is mislabeled.

9. Why should I care about GIK? What difference does this make for me, a CHF donor?

Donors expect their gifts to be effectively and efficiently used. Properly used, GIK deliver far more value to the people we help than just sending cash. And they deliver far more donor-value as well.

If you were to give $1,000 (HK $8,000, €1,000) to CHF, which makes better sence:

*to commit your donation to buying goods locally (if those goods are even available),

*to solicit quality donated goods from manufacturers and ship those donated goods to our projects?

Almost always, it makes far more sense to solicit donated merchandise and import goods to our projects. We normally can leverage each donation we receive by a factor of 5 to 10, over what we might have been able to send. With some medicines, we may spend 50 [units] to ship and distribute 2,500 [units] of medicines.

GIK also eliminate any concerns whether the goods are even available locally or whether they would be of high enough quality, including shelf life and “best use by” dating.

Of course, we also send cash overseas, and sometimes we do purchase supplies locally, when those supplies are available and local purchase is cost efficient. One example of this would be pasta, which often is too expensive to ship compared to what we can buy locally.

10. Does GIK ever get sold overseas?

We warn our partners that if this does happen, they will receive no further shipments from us and they will risk both criminal prosecution and legal recovery by CHF and the donating company. Each program partner signs a contract with CHF protecting our GIK from this kind of activity.

11. How do you know the commodities CHF sends are actually useful for the people in need and respect their own customs and traditions?

We only ship supplies that our local partners have specifically requested; we do not ship just because we want to. We train our partners to be as specific as possible in what they want. When they ask for "medicine", do they mean over-the-counter cold and flu medicines, some sort of antibiotic cream perhaps, or even a chemotherapy regime? When we are in doubt, we may ask for additional information or visit the partner site to ascertain the need and the appropriateness of the GIK requested.

While we aim for cultural and program appropriateness in GIK that we send overseas, our ultimate authority for local needs, culture, legalities, and traditions will always be our local partners or our indigenous staff, as well as the governments of host countries (when their input is appropriate).

12. Some people argue that GIK can destroy a local economy. Do you agree with this?

It can happen for certain commodities, and we work to avoid this. For example, if a community in Guatemala has a local factory employing 100 people to make shirts, we could undercut the local economy by shipping 50 sewing machines to help others nearby set up their "at home" business of making shirts. We face a constant pressure of macro- (community) needs vs. micro- (individual and family) needs.

13. How do you decide who will distribute CHF´s GIK overseas?

Our consignees and program partners must be locally "legitimate" (a registered charity, a known service club, a government agency, etc.) with good references, strong governance and a proven ability to handle the kinds of GIK they are requesting, as well as the quantity they request. Do they have the manpower necessary? The trucks? The warehouse space? The security? Will they report back reliably? Do they have a "business plan" which gives them an orderly structure to be both efficient and effective?

14. Are CHF´s donors (whether giving money or commodities) protected by GIK Standards?

Yes. When donors support organizations using GIK properly in the adherence to the AERDO Standards, they can be confident that all reasonable steps and due diligence have been undertaken to ensure that high quality commodities are sent to people in genuine need, using good security and proper accounting methods, and with both program appropriateness maximized and a high degree of accountability and transparency at all stages.

15. What is the biggest objection you have ever heard about GIK?

GIK sometimes gets a "bad report" when well-meaning people, ignorant of "best practices", attempt to send GIK. They collect what appears to be a great load of used clothing, food, personal hygiene supplies, books and medical samples and then ship their goods overseas without consideration of local needs, local regulations or even the ability of their consignee to clear local Customs or properly distribute goods.

What happens can be ruinous to local organizations who get overwhelmed with materials they have no capacity to distribute … either because they don't have local resources like trucks and warehousing, or they simply don't want the goods.

16. Do you reject offers of GIK? Why?

Usually we reject GIK because of short shelf life as determined by "expiration" or "best use by" dates on packaging. We also don't accept GIK which could be put to questionable use or which violate the CHF family's core values. We do not accept GIK which is unfit for human consumption. (Someone once offered us freshly canned vegetables, so dating was not a problem. But the cans also had small pieces of rock mixed in with the vegetables!)

17. Where do you store your GIK?

To keep expenses low, CHF stores GIK wherever it is safe, and at minimal or no cost to us. GIK donors often let us use their facilities for storage until we are ready to pick up their donation, usually just a few days before overseas shipping. We also store at ports in our ocean-going containers, as well as at our partners or our own facilities in the host country. Part of our cost-saving comes from our ability to coordinate donor pick-ups with shipping schedules for our freight carriers (whether on water, land or air).

18. Has CHF ever “lost” a container?

It's happened in only one country, the Philippines, where corruption is common on the waterfront of all ports in the island nation. We have eliminated theft in the Philippines by slowing our shipping volume, so our containers do not get backlogged at local freight forwarders, which is the most vulnerable point for theft. Our program partners understand that as their ability to handle more containers grows, we will work to ship more containers to them.

19. What kind of support do you give your overseas partners when you send them GIK?

We make sure locals are properly trained to operate GIK equipment, whether medical, vehicles, educational or otherwise. Administratively, we train local partners in what we expect for reporting and accountability. We teach them how to design better programs and then report their needs more effectively to us in their requests for aid (i.e., proposal writing). Financially, we may help pay distribution costs.

We help local groups deliver more and better services to the people they seek to help. We call this "capacity building", and it is essential to long-range programs designed to ease global issues such as hunger, disease, a lack of education and poverty.

20. All fine and good, but when I give cash I want my cash to go overseas, directly to the children in need. I do not want it spent procuring and shipping GIK.

We hope you will reconsider, by using cash to ship GIK, we are able to leverage an unusually high "return on investment" for the funds you donate.

But we also send funds directly overseas for local use. We do this especially when it is as effective to buy locally as to ship from overseas (particularly true for bulk rice, flour and pasta, as well as building supplies). Of course, shipping low value food sometimes is essential if regular food channels in the host country are not operating (for example, after a natural disaster).

21. How can I obtain more information about CHF´s GIK programs?

If you would like more information about how CHF uses or accounts for GIK, please contact us at . If you or your business would like information about whether CHF can use GIK that you would like to donate, please contact us. In either case, please leave us your telephone number and e-mail address, and we will respond to your inquiry promptly.