Everything Nonprofit Leaders Need to Know About In-Kind Donations

“How does a project get to be a year behind schedule? One day at a time.”— Fred Brooks

Avoiding a difficult project only delays the outcomes you’re trying to achieve. In-kind donations are one of those things that many nonprofits simply avoid because they can be seen as difficult to define, value, and track.?

However, despite the somewhat messy nature of in-kind donations, they are a powerful source of positive outcomes for nonprofits that, when well-managed, can be leveraged to strengthen almost every aspect of your organization.?

While receiving cash donations is wonderful, in-kind donations can also go a long way to further your nonprofit's cause.

What Are In-Kind Donations?

In-kind donations include any type of non-cash contribution to a nonprofit including donations of goods, services, expertise, and time.?

Examples of in-kind donations include articles of clothing to a free clothing closet, free advertising space, free graphic design services for an event, pro bono legal advice, or employee time donated from a local business.?

Individuals, businesses, vendors, tradespeople, corporations, and individual professionals can all make in-kind donations to nonprofit organizations.?

How In-Kind Gifts Can Benefit Your Nonprofit

5 Ways Kind Donations Can Further Your Nonprofit’s Mission:

1. Expand Your Support Network

If you only fundraise for and accept cash donations, you will limit your nonprofit's potential by limiting the potential giving capacity of your donors.?

Read More:?Successful Fundraising for NonProfits - Advice From An Expert

Accepting in-kind gifts is a great way to expand your nonprofit's mission and reach by building its support network. While many individuals or businesses might not be able to donate cash to your cause, they can help support you in several other ways by donating goods, services, expertise, or professional time.?

2. Reduce Overhead Expenses

In-kind donations can also reduce your overhead expenses by offsetting operating costs.

If you receive an in-kind donation for things like advertising space, office supplies or equipment, legal advice, accounting services, or another cost that's essential to your nonprofit's operation, you'll reduce your overhead expenses. As a result, you can dedicate more of your cash donations to furthering your mission.?

3. Additional Revenue Sources

Although in-kind donations don't look exactly like your other revenue sources, they do count as revenue, and they can help you offset the cost of your mission.

?????Case Study: ?Detailed project reporting has helped Wheelchairs For Warriors make decisions that further their mission. With clarity and insight into each program, leadership was able to successfully launch an in-kind donated wheelchair reallocation program. They can now help veterans not injured in the line of duty with wheelchairs that are donated.?

4. Access to Items at Cost

If your nonprofit gathers back-to-school supplies like new pencils and socks for children in need, you might actually be able to help more children by requesting in-kind donations instead of cash donations.

For example, a pencil or sock retailer can donate items at cost. Compared to asking a donor to give money to purchase pencils and socks from the retailer, in-kind donations will result in access to more pencils and socks. As a result, your nonprofit will be able to help more children in need.?

5. Free Up Cash for Operating Costs

In-kind donations that are directly related to your mission (cans of food donated to a food bank) mean you need to spend a smaller portion of your cash donations on your services. This frees up cash that you can then put toward operating expenses like payroll and office rent.?

Watch Out for These Potential Challenges of Accepting In-Kind Gifts

Although in-kind gifts can be a blessing to your nonprofit's mission, not all in-kind gifts are created equally. They won't all benefit your organization, and choosing to accept in-kind donations can present some challenges.?

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