Why accept in-kind donations?

With cash donations, your nonprofit can spend funds however you want (with some limitations depending on if it’s restricted or unrestricted funds), while in-kind donations provide supplies directly to your nonprofit. When your nonprofit puts the right gift acceptance policies in place, your in-kind donation program can provide a stream of useful gifts that come with a variety of benefits, including:

• Immediate access to in-demand supplies and resources. When your nonprofit receives donations for supplies, you’ll need to take the time to budget the funds, determine what you’ll buy, and then go out and actually make a purchase. In-kind donations cut out the middle man by giving your nonprofit immediate access to high-value and in-demand items you’d otherwise need to buy. 
• Increased giving flexibility for donors. Sometimes supporters don’t have it in their monthly budget to donate or increase their monetary support. With in-kind donations, they can contribute new and slightly used items they already have, allowing them to continue supporting your cause.  
• High-value items for auctions. If your nonprofit is hosting an auction, you’ll need to form a procurement team to go out and ask for in-kind donations. Of course, if you already have an in-kind donation program, your nonprofit can form strong connections with businesses and establish a process for accepting non-cash donations ahead of time, making your procurement team’s job easier. 

To make sure the items you receive through your program are useful, set up a gift acceptance policy. These should establish what your nonprofit can and cannot accept in advance, giving individuals supporters guidance for what they should give and encouraging them to do so by highlighting your most in-demand items. 

Who gives in-kind donations?

Just like with monetary donations, both individual supporters and businesses can make in-kind donations. Contributions from both groups can be helpful depending on your nonprofits’ needs. While supporters and businesses will have unique assets to donate, here’s an overview of the types of in-kind donations you can expect from each group:

• Individual supporters. Individual supporters’ contributions can vary wildly without proper guidance. Many nonprofits that accept in-kind donations from individual supporters will run giving campaigns centered around a select few items, such as donating blankets and warm clothes to a homeless shelter or books to a local library. 
• Businesses. In most cases, businesses will give items that are relevant to their own operations. For example, an adventure park might donate free zip lining tickets or an office might turn over their old but still usable computers to your nonprofit when they’re ready for an upgrade. 

When reaching out to both businesses and supporters, have your in-kind donation acceptance guidelines ready so you can quickly answer any questions they might have about donating. Plus, arming your staff with your guidelines can also help them make sense of any more unorthodox gifts you might receive and make a quick decision about whether your nonprofit will be able to accept them. 

What are some examples of in-kind donations?

In-kind donations can be all sorts of items as long as they’re not monetary contributions. For simplicity’s sake, in-kind donations can be broken down into two essential categories: goods and services. 

• Goods. Goods include physical items, ranging from a blanket donated to a homeless shelter to a moving truck donated to Habitat for Humanity. These items can be used to improve your nonprofit’s operations or to directly fulfill your mission, such as handing out collected warm clothes to families in need. 
• Services. Any service your nonprofit would usually need to hire someone for can be given to your cause for free as an in-kind donation. For example, a professional photographer might agree to take photos for your website and promotional materials over the course of an afternoon for free. 

For both goods and services, make sure you get an estimate of its cost. This will be necessary for your nonprofit’s accounting and ensure you can more easily distribute receipts to donors so they can get a tax deduction in exchange for their contribution. As services can be a bit harder to estimate the cost of, be sure to consult with the person donating their services ahead of time.