Although financial gifts are vital to nonprofits’ ability to further their missions, many organizations focus solely on this type of support. However, there are plenty of other types of donations your nonprofit can benefit from. In-kind donations are one such essential gift category that your charitable organization may be overlooking.
If you’re interested in accepting in-kind donations at your nonprofit but aren’t sure how to start, look no further than this guide. Whether you want to round out your next event’s auction packages or need supplies for your community programs, in-kind donations can provide the key support you need.
What are in-kind donations?
Your nonprofit needs plenty of items to support its cause, from program-essential items (such as food ingredients for a soup kitchen) to decorations for your upcoming fundraising event to appreciation gifts for your donors. Usually, you’ll use funds secured from fundraising, grants, or other revenue streams to purchase these items.
With in-kind donations, you can cut out the purchasing step by receiving the items you need directly from generous community members. According to Jitasa, in-kind donations include “any and all non-monetary donations to nonprofits or causes. They refer to the transfer of any assets, usually goods or services, to your organization from an individual, company, or other nonprofit.”
Food pantries are a common example of a nonprofit that greatly benefits from in-kind donations. These organizations accept financial contributions but also frequently request in-kind gifts by publishing lists of most-needed items on their websites or hosting canned food drives.
What are the benefits of accepting in-kind donations?.
Although in-kind gifts are less flexible than liquid funds, they still provide many benefits, including:
- Cost savings: In-kind donations can offset overhead expenses that your nonprofit might normally incur, such as for office supplies or event decorations. With a reliable supply of in-kind gifts, you can save your liquid funds for programs, services, and capacity-building projects.
- Long-term sustainability: When financial gifts are inconsistent or unpredictable, in-kind donations can provide diversified support that enables you to continue furthering your mission.
- Mission visibility: In many cases, an individual doesn’t need to be familiar with your organization and mission to make an in-kind donation. The donation might simply be convenient for them. By accepting in-kind gifts, you can access new audiences and boost your mission’s visibility, helping you acquire and steward more donors.
- Expanded community engagement: Your nonprofit likely has plenty of supporters who can’t or don’t want to make a financial donation. Accepting in-kind donations allows them to interact with your nonprofit’s mission in another way, leading to greater engagement. Plus, they’ll experience your donor stewardship efforts, which can result in stronger relationships and even future monetary gifts or other forms of involvement.
- Increased supporter loyalty: Adding new ways to give to your nonprofit’s roster creates fresh and exciting touchpoints that can lead to additional stewardship activities. All of these factors increase supporter loyalty at your nonprofit, helping you build a strong community around your mission.
The trade-off to these benefits is that accepting in-kind donations brings new challenges for your nonprofit. For example, you may need to figure out how to track or store donations of goods.
Additionally, according to ThriftCart, you’ll typically need to create a new donation tax receipt template specifically for in-kind gifts.
How can in-kind donations support your mission?
Not sure how in-kind donations can support your mission? Here are a few common ways charitable organizations use gifts of goods and services:
- Supplies for specific programs: We mentioned food banks above as an example of this, but plenty of other causes can also benefit from accepting in-kind donations. For example, animal shelters might accept donations of pet food, dog beds, and cat litter for the animals they house.
- Office equipment and technology: Nonprofits can supply their offices with equipment and supplies from in-kind donors, from desks to computers to certain nonprofit software solutions.
- Auction items: Auction item procurement can be complicated, as you need to balance value with audience appeal while keeping upfront costs low. However, you can reach out to major donors and corporations for in-kind donations of auction items to provide a larger array of items for bidders without paying out of pocket.
- Thrift store inventory: Some nonprofits operate thrift stores as an additional revenue source — Habitat for Humanity ReStores are a great example. In those cases, nonprofits can really benefit from in-kind donations, as they can use it as an inventory source for their stores.
- Professional services: Remember that in-kind gifts aren’t limited to goods — services are another option! Especially when nonprofits are starting out, donated services such as marketing or legal counsel can be very helpful.
Although these are the most common uses for in-kind donations, feel free to get creative! As long as the in-kind gift benefits your organization and its mission, you can ask for it. Just keep in mind that for in-kind donations you plan to store long-term, it’s best to utilize a dedicated inventory management tool to keep track of them.
How can you increase in-kind donations?
Before you announce to your community that your nonprofit is accepting in-kind gifts, you must first lay down some ground rules and implement best practices to ensure that you receive helpful goods and services. Here are a few tips:
- Outline clear guidelines: Make it clear exactly what types of in-kind donations you’ll accept by creating a dedicated page on your website. On it, list the items you want, the condition the items should be in, and any other relevant information. For example, if you’re looking for clothing for your nonprofit’s beneficiaries, you might specify that the items should be in new or good condition, with no stains, tears, or other visible damage.
- Make the process easy and accessible: On your website’s in-kind gift page, also specify what the donation process will look like to make it easy for donors. You can either designate a donation dropoff spot or offer pickups for items. Donations of services may need to be handled on a case-by-case basis, but you should connect with the donor to discuss when the services will be provided.
- Build strong relationships with local organizations: Individuals aren’t the only possible source of in-kind support. Local businesses, community organizations, and other nonprofits can also provide key in-kind donations that support your priorities. In particular, you can tap into corporate generosity by researching corporate giving programs and leveraging your network to secure gifts from these organizations.
- Host in-kind donation drives: Similar to hosting a fundraising event, a donation drive allows you to generate excitement around a specific set of in-kind donations and give community members an easy way to contribute, resulting in more gifts.
Be sure to incorporate in-kind donations into your marketing cadences as well. Let supporters know if your nonprofit has any high-priority goods or services it needs, and add a link or QR code to your website’s in-kind donation page so the reader can easily navigate over to get more information.
Don’t overlook in-kind gifts when soliciting donations for your nonprofit. With these tips and strategies, you’re in a great position to start making the most of these valuable contributions. Get your leadership on board and dive right in!
