In-Kind Donations: What They Are and Why They Matter

Diversified revenue streams are essential for all nonprofits. Your organization might rely on a medley of individual donations, grants, events, membership dues, and other revenue streams to keep your mission in motion and create a sustainable funding model. 

 

When it comes to driving value for nonprofits, in-kind donations are another essential type of contribution to add to your collection. In this guide, we’ll review some of the most common FAQs about in-kind donations to give you a solid foundation for boosting this type of giving, including: 

 

• What are in-kind donations?
• What are the benefits of in-kind donations?
• How can you receive more in-kind donations?

 

For the people who believe in your mission, contributing in-kind gifts can be a remarkably fulfilling and meaningful experience. Make the most of your donors’ generosity by creating a clear in-kind giving strategy with the help of the tips in this guide. 

What are in-kind donations?

In-kind donations are non-monetary donations made to nonprofits. This encompasses both tangible donations (goods) and intangible donations (services). Here are a few examples of each type of in-kind gift: 

 

• Goods can include gifts of office supplies, equipment, food items, clothing, and other tangible items. 
• Services usually include donations of pro bono work, such as free financial assistance or graphic design support. 

 

No matter their nature, in-kind donations can help you better serve your community, supplement your internal expertise, and supply your fundraising efforts with the resources and support they need to succeed.

What are the benefits of in-kind donations?

In-kind gifts benefit both nonprofits and donors, making these donations a win-win opportunity to build stronger community relationships. Let’s explore a few specific advantages of these gifts. 

For nonprofits

• Receive the items you need without having to spend money on them. Let’s say your nonprofit is hosting a silent auction, and you need to gather a variety of items to put up for bidding at the event. By asking your supporters for in-kind donations of auction items, you can get the prizes you need to host an amazing event without spending your event budget to procure these items. Ultimately, this allows you to direct more funding to the mission-critical programs that support your beneficiaries. 
• Use donations immediately. With monetary donations, your organization must wait until the gifts process before you can buy much-needed items or supplies. However, in-kind contributions can be used immediately. For example, you can start using your newly donated printer right away, or start working with a volunteer graphic designer without having to wait for a payment contract to be finalized. 
• Fill gaps in your team’s expertise. In-kind donations of services or pro bono work can help you meet internal goals by providing free access to professional expertise. For instance, let’s say you want to create a few website videos with testimonials from beneficiaries. You can work with a videographer who donates their time and services to create high-quality videos because they believe in your mission.

For donors

• • Act as a convenient alternative giving option. In-kind donations present an additional giving avenue for donors who don’t want to or can’t provide monetary donations. They will appreciate being able to support your nonprofit’s mission without always having to contribute funds.

• Donate items or services they already have. Donors will appreciate the ability to donate items they’re not using to support a good cause and reduce clutter in their lives in an environmentally friendly way. For instance, perhaps a local business accidentally ordered 15 extra office chairs they’re not using. Instead of letting these chairs take up space in their storage room, they can donate them to your nonprofit, where they’ll actually be used. 

• Form stronger, long-lasting ties to your nonprofit. In-kind gifts can lead to more tangible connections between donors and nonprofits. For example, donors may feel a sense of pride and accomplishment when they see that the car they donated is being used to deliver supplies to individuals experiencing homelessness. In addition, donors who contribute pro bono work to your organization can form strong personal connections with your staff members as they work together to improve your organization’s operations. 

How can you receive more in-kind donations?

After reviewing the benefits of in-kind giving, you might be motivated to add this giving channel to your revenue strategy. However, it’s important to approach in-kind donations strategically to make the most of them. Use these best practices to help spread awareness about and engagement with your in-kind donation opportunities.

Create an informational website page

Design an educational website page to describe your new in-kind giving options. Include the following information: 

 

• Types of in-kind donations your organization can accept
• Benefits of in-kind donations for both your nonprofit and donors (borrow from the benefits listed above!)
• How donors can submit in-kind donations
• Tax benefits of in-kind donations

 

Make your information page user-friendly by using clear language, and demonstrate the impact of in-kind donations through multimedia content. For example, you could create a video showing the art and playroom equipment donated to the children’s play area at your nonprofit’s headquarters. This shows potential donors that their contributions will make a real difference for your organization’s beneficiaries. 

Write compelling donation requests

You can also reach out to prospective donors directly to spotlight your new in-kind giving opportunities and ask for their support, especially if you’re asking for a high-value good or a service that requires specific expertise. Connecting with these donors requires creating a compelling donation request that makes it easy to give. 

 

First, use your nonprofit’s CRM to identify donors who may be able and willing to give the items you’re looking for. For example, if you’re looking for donations to your annual auction and gala event, you can start with past auction attendees who have a high giving capacity. 

 

Then, Winspire’s guide to effective donation requests recommends following these best practices to draft your request letter or email: 

 

• Brand requests to your nonprofit. Design the message with your nonprofit’s logo, colors, typography, messaging, and other unique brand elements. This helps your request stand out and be more recognizable to supporters. 
• Demonstrate the impact of in-kind gifts using storytelling. Share stories about how in-kind gifts support your ability to achieve your mission. Show how the gift of gardening equipment helped bring your community garden back to life, or how pro bono construction services helped build the stage for your annual benefit concert. 
• Include a call to action with a specific ask. Conclude the letter with a specific request for the items or services you’re looking for. For instance, you could say “Would you be willing to contribute a prize to make our upcoming auction the best one yet?” Then, list a few examples of items the donor could contribute that would align with their background and interests. For example, if you’re contacting an electronics store owner, you might ask them to donate a new smartphone, fitness tracker, or video game console to auction off.

 

Provide specific details for how donors can send in their donated items, whether by mail or by dropping them off at your nonprofit’s facility. Also, offer contact information for a member of your staff that they can reach out to if they have any questions. This will make the giving process as seamless and convenient as possible. 

Leverage corporate partnerships

Many companies want to make a positive impact on the world and boost their reputations through corporate social responsibility, so they’re increasingly willing to sponsor nonprofit events and provide in-kind contributions. 

 

Plus, many businesses encourage their employees to donate their time and expertise to nonprofits in their community. For instance, volunteer time off (VTO) is becoming more popular as a way to empower employees to use their paid time off to support worthy causes. 

 

By forming corporate relationships, your nonprofit can benefit from this increased desire to leave a positive impact. Getting Attention’s guide to securing corporate sponsorships offers these four steps for building these partnerships: 

 

1. Identify potential partners. Companies in your area with similar missions to your nonprofit are a great place to start. For example, an animal rescue nonprofit could partner with a local pet store to benefit from in-kind donations of toys, treats, dog beds, and cat litter. Ask your nonprofit’s staff and volunteers if they have any connections to local businesses looking for charitable giving opportunities. 
2. Initiate a relationship. Invite prospective corporate sponsors to meet with your nonprofit’s staff and leaders in person and tour your facilities. Inquire about their business goals to see how their charitable aspirations align with your giving opportunities. In addition, provide information about your nonprofit’s mission and goals and demonstrate your impact by sharing your annual report and Form 990. 
3. Show the benefits of getting involved. Demonstrate the win-win benefits of starting a partnership with your organization. For example, you might provide free publicity in exchange for support by including your sponsors’ names and logos on event marketing materials such as brochures, flyers, emails, and social media posts. 
4. Make a direct and specific ask. Have a clear idea of the type of in-kind donation you’d like to ask for, whether you need supplies, equipment, auction items, or pro bono services. Plan an in-person meeting to make this request to re-emphasize your personal relationship with the sponsor.

 

Foster a positive, ongoing relationship with corporate partners by providing follow-up information about how your nonprofit put their donation to good use. Thank your sponsors publicly using your social media and email platforms to bring awareness to their business and promote your partnership. For corporate partners that go above and beyond, consider a significant recognition like a digital donor wall or an appreciation event.

 

To widen the scope of your corporate sponsor search, explore lists of the top companies that donate to nonprofits. Many major employers have wide-reaching philanthropic programs, and people in your community likely work for these companies. For example, Microsoft sponsors pro bono legal services to support individuals and nonprofits in need. 

Know the limits of in-kind donations

While it may be tempting to try to replace all paid services or goods purchases with in-kind donations, these gifts do have their limits. If you need access to consistent, reliable expertise for certain projects or issues, it’s best to bring on a paid professional who can guide you through any challenges.

 

In addition, you may not want to accept all in-kind donations that come your way. Some well-meaning donors may contribute items that are too worn, defective, or irrelevant to your needs. To reduce the risk of this happening, outline a clear gift acceptance policy to define the types of donations you can and can’t accept. Specify the types of gifts that help your mission the most and the condition that each item must be in.

 

Lastly, keep in mind that it can be challenging to acquire certain types of in-kind donations, like vacation packages for auctions, from individual donors or corporate sponsors. These big-ticket items might be outside the price range for many donors, or they don’t have the connections needed to procure these prizes. In that case, it can be helpful to work with a consignment provider that specializes in experiential travel packages. 

 

In-kind donations can boost your nonprofit’s fundraising efforts, creating a reliable additional revenue stream. With an intentional strategy and clear communication, you can foster more in-kind giving and receive more of the goods and services that are most helpful for your mission.