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Network: August 1992

Network questions and answers.

A lack of donations has so far frustrated a professor's charitable work in Czechoslovakia. Read on to find out how to donate . . . and why most companies don't. Also, here are questions about marketing, compensation, and more. Remember to send us your advice -- we'll print the best reader responses.

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Charitable Czech computer chase
A professor from our small university is building a computer lab at a college in Czechoslovakia. We've unsuccessfully solicited donations of computer equipment for him. How can we persuade business owners to donate what we need?

John W. Warren

Vice-President of

University Relations

Shenandoah University

Winchester, Va.

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Maybe companies aren't responding because there's not much incentive for them to donate. "Tax laws work against charitable contributions," says Murray Alter, a partner at Coopers & Lybrand in New York City. A company with a $10,000 computer system that's depreciated $6,000 can deduct $4,000 if it throws the system away. But donating that system limits the company to a deduction of no more than 10% of taxable income in the year of the donation. If the company wants to take the full deduction in one year, it may be better off telling the IRS it threw the equipment away. But companies can carry forward the balance, after deducting 10%, and deduct it next year. Donating inventory is more complicated, so consult an accountant.

Several organizations act as clearinghouses for donated equipment. National Computer Exchange (800-622-6639) arranges for donations in which the recipient picks up equipment and provides for tax purposes a receipt quoting fair-market value. (The IRS has substantial penalties for inflated estimates.)

Roughly 50% to 70% of donations to the East West Education Development Foundation (617-542-1234) go to Central and Eastern European schools. Donors may ship newer models of IBMs, compatibles (no pre-DOS, please), and Macs to the foundation's Boston headquarters. (Shipping costs are tax deductible.)

Some companies sidestep the middleman and donate directly to charities. Donors should confirm any charity's 501C3 status. (See "Probing a Charity's Financials," Financial Strategies, [Article link], May 1992.) Jerry Caulder, CEO of Mycogen, a pesticides manufacturer in San Diego that gives equipment to schools, advises: "Don't just call someone up and give the equipment away. Pick an entity and establish an ongoing relationship. That way you can donate what it really needs."

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Selling Services
Your articles on selling seem to concern mainly goods. I sell a service -- trucking and warehousing -- and I'd like to expand my niche. Can you suggest any books?

Mike Baicher

Sales Director

West End Express

Irvington, N.J.

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Harvey Gainey, president of Gainey Transportation Services, in Grand Rapids, recommends Effective Marketing for Motor Carriers, published by the American Trucking Association, in Alexandria, Va. (703-838-1754), and a follow-up, Implementing the Marketing Plan ($35 each; $60 for both). Gainey thinks there's little difference between marketing a product and a service. He credits his success to pickiness. "We select our customers, not vice versa," he says. "If they want the best service they can find and are willing to pay a little more for it, we latch on to them." About 2% of customers are looking for that. Others want the best but are sensitive to price. Gainey works to prove he's worth it. The rest just want cheap service. "We tell them no thanks." That policy keeps margins at levels unheard of in the trucking business, Gainey says. And if it slows growth, the three-time Inc. 500 company hasn't noticed.

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In Search of Venture Capitalists
Where can I find a list of venture-capital firms?

A. Richard Nernberg

President

A.R. Building

Pittsburgh

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The industry bible, Pratt's Guide to Venture Capital Sources (SDC Publishing, 212-765-5311), indexes 800 venture firms by company name and industry, and includes articles on the state of the industry. Look for Pratt's at the library. (It costs $195.) The National Venture Capital Association, in Arlington, Va. (703-528-4370), publishes a list of its members -- 200 large venture firms -- that's free to members, $15 for nonmembers. Venture-capital databases can speed up your search. (See "Venture Directories on Diskette," Banking and Capital, [Article link], January 1992.)

But if you plan simply to do a mass mailing to big venture firms, there are smarter ways to get capital. Networks can match you with likely investors. The nonprofit Venture Capital Network (617-253-7163) at the Massachusetts Institute of Technology, in Cambridge, Mass., works with investors in 33 states. A $250 initiation fee keeps members active for 12 months. And the International Venture Capital Institute, in Stamford, Conn. (203-323-3143), lists 150 domestic and international venture-capital clubs. (Also see "Matchmaking by Computer," Banking and Capital, [Article link], October 1991.)

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