Note: The following guest post comes to us courtesy of Gary C. Smith, the president and chief executive officer of the National Association for the Exchange of Industrial Resources (NAEIR), the oldest, largest gifts-in-kind organization in the U.S. NAEIR receives donations of excess inventory from American corporations and distributes the material to a membership base of more than 13,000 charities. It has collected and redistributed more than $3 billion worth of new, donated supplies and equipment since its founding in 1977. On average, NAEIR members acquire more than $18,000 worth of free products per year for their organizations. www.NAEIR.org

It’s a given: with budgets tighter than ever, schools need to be creative in doing more with less. Yet many dismiss one very real resource because they’re convinced there must be “a catch.” But it’s not too good to be true.

That resource: gifts-in-kind organizations. These organizations collect donations of new merchandise from U.S. corporations and redistribute it to its not-for-profit members, including schools, for free.

Free class materials. Office and art supplies. Janitorial supplies. Sporting goods. Plus, tools, toys, software, books and media, personal care items, party goods, and more.

Schools can browse catalogs of donated supplies and request what they need, saving on classroom and other supplies and limiting teachers’ out-of-pocket costs.

What’s the catch? There isn’t one. Typically, members pay a modest annual membership fee, plus nominal shipping and handling costs. That’s it. It ends up costing schools a fraction of what it would to purchase the same supplies through conventional channels.

Who’s doing the donating, and what’s in in for them? Companies like Microsoft, Stanley Tools, 3M, Rubbermaid, Rand McNally, Reebok, Gillette, Xerox, SC Johnson, Louisville Slugger, Hallmark and thousands of others participate.

One benefit is that they’re supporting meaningful charitable causes. At the same time, they’re taking advantage of tax deductions, reducing storage costs, clearing warehouse space, and avoiding hassles with liquidators. And instead of clogging landfills, they’re putting unused goods to use.

For example, take the cost-conscious Steele Elementary School in Galesburg, Illinois. When the school wanted to host a family arts and crafts night, it turned to its gifts-in-kind organization for the needed supplies. It received enough paintbrushes, ornament shapes, tablecloths, stickers, and pipe cleaners for all 341 participating students.

Their membership in the gifts-in-kind program made the extra-curricular event possible.

The rules are simple. Participating organizations must agree to act in accordance with IRC section 170(e)(3), which states that merchandise must be used for the care of the ill, needy or minors. It cannot be bartered, traded or sold. The merchandise can be given directly to qualifying individuals served by an organization or used in the administration of the organization.

Savvy schools nationwide are taking advantage of this service to stretch their budgets, while offering students more opportunities. Needless to say, teachers are big proponents of the program.

Says one Chicago educator, “Over the years, we received pens, papers, office supplies, scrapbook supplies, hats, push brooms, flashlights, lunchboxes, tools and clothes.

“As a teacher, ‘free’ is a very important word!”

In these days of slashed funding and shrinking budgets, the question isn’t if gifts-in-kind organizations are too good to be true. The question is: if your school hasn’t explored this option yet, what are you waiting for?