A Non-Profit’s Guide to In-Kind Donations

What Are In-Kind Donations?

In-kind donations are non-monetary contributions to an organization. While cash may be preferred, it may be beneficial to accept other types of contributions. Some donors may be limited in the financial support they can offer. Others would prefer to offer a contribution that is practical to the needs of the organization.

Examples of in-kind donations include:

  1. Goods: A charitable organization may accept physical items that could be used to benefit their mission. For example, a pet rescue center may accept pet food from generous donors to help feed the animals they care for.
  2. Services: Some members of the community may have valuable professional skills that they offer to help an organization. This could include legal advice, web design, marketing assistance or consulting services.
  3. Facilities or Equipment: Some generous businesses may make some of their office space or equipment available for a non-profit to use. This type of donation can save an organization thousands of dollars.
  4. Land or Property: Well meaning individuals or businesses may donate land, buildings or other real estate that an organization could use for a community project or some other purpose.

In-kind donations can be very useful for an organization with limited resources. By accepting in-kind donations your non-profit organization will create more opportunities for people to donate to your cause.

Create an In-Kind Donation Policy

It is not likely that your non-profit organization needs everything that the generous people of the community have to offer. Some well-intended donations could lead to a waste of time and resources if they are not actually useful to your organization. To avoid filling your office with things you don’t need, consider creating an in-kind donation policy.

This policy should include:

  1. The Types of In-Kind Gifts You Will Accept – Clearly identify the supplies and services that your non-profit needs. This will allow your donors to understand how they can practically fill your needs.
  2. The Types of In-Kind Gifts You Will NOT Accept – It’s important for people to understand which items would not be beneficial to your organization. Including this in your policy will prevent the waste of time processing donations that are unusable. Thereby allowing potential donors to redirect their donation to a cause who will make good use of their item.
  3. Condition of Acceptable In-Kind Donations – Some may be willing to donate new or used items to your non-profit. While a new or gently used item may prove to be very useful, more heavily used items may not. Be specific about what item conditions would be beneficial and acceptable.
  4. In-Kind Donation Drop-Off Details – Since in-kind donations can come in all shapes and sizes, you will want to make sure that someone from your staff is available to receive items that are being dropped off. Therefore, be sure to include when you are able to accept in-kind donations and where they should go.

Tracking In-Kind Donations

It’s important to keep accurate records of all in-kind donations. Doing so will allow you to thank your donors accordingly and allow you to keep accurate financial statements. The IRS does have some requirements for reporting such donations. You can read about those requirements on the IRS website. It would also be helpful to consult with a tax professional to understand your organization’s specific needs.

Be sure to give your donors a receipt of their donation for their records. Keep in mind that donors are typically responsible for providing the fair market value of their gift.

You should always thank donors for every gift that your receive. Make it a standard practice to send an acknowledgement letter to your donor that includes a description of the goods or services donated and the date you received them.

Donor Wrangler is a donor management platform that will help you to track all your in-kind donations. When adding a new donation, the program will prompt you to send an acknowledgement. This helps you to be sure that you have followed through on this necessary step.

Start your Free Trial to see this and the rest of our features in action or schedule a Guided Walkthrough with our development team to see how Donor Wrangler can address your organization’s unique needs.

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