In-Kind Donations 101: A Guide for Nonprofits Fundraising Blog for Nonprofit, Educational, and Faith-Based Organizations

donation in kind meaning

When it comes to soliciting the right types of in-kind donations, nonprofits need to identify their needs, develop a gift acceptance policy, ask their stakeholders, and then ask their wider community. In-kind donations can serve a variety of purposes at your nonprofit, as long as you procure them strategically. After every supply drive, fundraising event, or other collection of in-kind contributions, take note of what went well and where you can improve your strategy for soliciting and accepting these gifts. If someone gave a particularly valuable gift or you want your in-kind corporate sponsorship to be mutually beneficial, you should also consider recognizing the donor publicly. When you start planning an auction, get your team together to brainstorm a wish list of auction items.

When approaching businesses, look to partner with a business related to your cause. For example, if you’re asking for school supplies, approach office supplies stores to donate some of their products. Appeal to both local businesses and larger corporations to maximize your impact. Because in-kind donations still count as revenue for your nonprofit, you need to ensure you follow all of the IRS’s guidelines for including them in your Form 990. By understanding what in-kind contributions are and how they work, your organization can ace tax reporting. Consult with a legal professional for information on how your nonprofit should handle these donations.

Are In-Kind Donations Right for Your Nonprofit?

Use Keela to automate the donation receipt process to save time, whether you issue receipts immediately or at the end of the year. As there must be a reasonable relationship between replacement cost and FMV, replacement cost rarely factors into fair market evaluations. If the supply of the donated property is more or less than the demand for it, which is often the case, the replacement cost becomes less important. The cost of buying, building, or manufacturing items similar to the donated item should be considered.

donation in kind meaning

You should also create a standard gift acknowledgment receipt to provide to donors, so they can claim a tax deduction. You may want to combine this with a thank you letter to show your appreciation. However, in-kind donations can be an especially cost-effective and simple method to gain extra visibility https://www.bookstime.com/articles/bad-debts-expense and secure customer loyalty using your own extra inventory of products and services. Once your nonprofit accepts an in-kind donation, make sure the donor is properly acknowledged and thanked. You know how you send thank you letters and acknowledgments to your donors after they’ve donated money?

Corporate social responsibility

In addition to providing a proper acknowledgment that includes tax-deductible information, delight your donors with a genuine thank you. Donated in-kind services include services provided by vendors, small businesses, consultants, professional service providers, etc. Services can include transportation, website development, graphic design, legal aid, accounting, marketing, and more.

donation in kind meaning

Whatever the case may be, explain just how impactful your donors’ contributions are. The key to a perfect in-kind donation thank you letter is its specificity. Unlike cash donations, even restricted ones, in-kind donations are extremely limited in their value to the organization. Use this template to create an operating budget and monitor your nonprofit’s financial performance during this fiscal year.

Documenting in-kind donations

In-kind donations needed are toys, crafts, supplies and special items for celebration and activities that distract children from procedures and more. Contributions large and small continue to make a difference in the lives donation in kind meaning of our patients and families. DonationMatch is a turnkey in-kind donation platform that helps businesses easily manage how products and services are distributed to deserving organizations within their communities.

donation in kind meaning


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