The best gift a nonprofit organization can receive is unrestricted cash, but an inkind donation of something your organization needs and would have otherwise purchased is also a high-value gift.
For example, if you are raising funds for a much-needed van and someone donates a van that meets your organization’s needs, you can close that campaign and focus your efforts elsewhere.
In reality, the van or other gift you receive is not exactly what you would have purchased. It may be older, smaller, a different model, and less-than-perfect.
But, it’s yours!
And it’s called an inkind gift.
Basically, it’s a non-cash donation made to a nonprofit organization.
It can be goods or services and can come from individual donors, corporations, or small businesses.
When you think about an inkind gift, you may think of stuff, such as bottled water and packaged snacks for events or hotel-sized shampoo and conditioner for a shelter serving homeless families.
But inkind gifts can also be intangibles such as professional services and rent-free space for offices or programs.
The social media specialist who helps you set up your social channels and content calendar then trains your staff on posting engaging content is an inkind donor, and a high-value one at that!
The company that donates surplus tote bags with their logo on them for families at your food pantry to use when shopping is an inkind donor. Yeah, it would be nice to have your organization’s logo on the tote bags, but if money to purchase tote bags isn’t in the budget this year, the donated ones will work just fine.
There’s more to inkind donations than you might think. Let’s take a closer look so you can handle these special gifts the right way and use them to grow your nonprofit.
Inkind Donations Benefit Organizations and Donors
Inkind donations provide goods and services you need, freeing up cash donations for other purposes.
Some organizations, such as clothes closets and food pantries, rely heavily on inkind donations.
Advocacy organizations and organizations that provide mental health services and other types of support, may not lend themselves as well to inkind donations of goods. But a donation of office space might be possible. Or a billboard for an ad.
Almost all nonprofits can benefit from inkind donations to some degree.
The surprising part is that donors benefit, too, from giving inkind donations.
For businesses, the advantage of an inkind donation is that a gift of something the business already owns does not impact cash flow.
A business may be able to get an item such as printer cartridges or cases of paper at a bulk discount, then share a few with you. (I’ve had that happen.)
Or maybe they have a graphic designer on staff who has a light workload and they can easily offer you graphic design services for your upcoming event without it costing them anything extra. (I’ve had that happen, too.)
When you approach a business for the first time, asking for an inkind gift can be a great way to initiate a relationship. It’s your way of saying, “I’m not asking for too much, just something you already have on hand.”
It’s usually an easier Ask than going for an expensive event sponsorship and hey, inkind donations can be GREAT for fundraising events, especially auctions!
For individual donors, there is often something special and more meaningful about giving a tangible gift, like a box of spaghetti and a jar of marinara sauce to a food bank or diapers and onesies to a family shelter.
The donor feels more connected to the mission by giving an inkind gift than making a cash donation on the organization’s website.
The donor that drops off laundry detergent today, could be a donor who gives a significant cash gift tomorrow. So never discount or underestimate those who like to give stuff.
InKind Donations You Don’t Need Benefit Only Donors
With all these advantages of inkind donations, what’s not to love?
Well, there can be a downside to inkind gifts from companies and individual donors. The first is the dreaded ‘take-this-off-my-hands’ gift.
This is a gift of something the donor does not need and wants to unload for whatever reason.
A few of these types of inkind “gifts” can cause an organization to decide to stop accepting inkind donations in the future.
Similar to that is the ‘this-will-cost-more-than-it’s-worth’ gift. Sometimes, you’re offered the donation of something like a piece of land that isn’t exactly usable and will cost more to fix up than it’s worth.
For example, a homeless shelter in my area was given a piece of property in a prestigious community. At first blush it seemed like a great donation…until it was discovered that the land was not usable for building on due to a steep grade.
So, what in the world would the shelter do with it? The donor thought the nonprofit could sell it which made no sense since the donor himself had been unable to sell it!
Another challenging aspect of inkind gifts is receiving supposedly gently used items that are more than gently used. You get the feeling the donor wanted to get rid of the items without the guilt of putting them in the landfill. So the landfill guilt gets transferred to you!
Often, thrift stores fill several dumpsters per month with unsellable items that have been donated. It’s unfortunate, but it happens. Sharing a list of what is and is not acceptable can help deflect some of these donations from well-meaning people.
Sometimes you get offered something in the spring that you’ll need in the fall, and you have to find a way to store it for several months. That means the “free” inkind donation could have a cost associated with it if you have to pay for storage. At a minimum, it will take up space that you could have used for something else.
Sometimes you get an inkind offer from a major donor or longtime supporter of your work that you feel obligated to take even though you don’t really need it, just because of the relationship. Be very careful here! I know you want to say “yes” to this important donor, but don’t set the precedent that you’ll say “yes” to crap donations.
And even when you get the exact items you need in great condition … it takes time to organize, store, and distribute everything. Even “free” donations take time to accept, store, use, receipt, and manage properly.
When looking at donations through the lens of convenience, cash is king, meaning monetary donations are always easier to manage than inkind donations.
Inkind Donation Success Story
To offset those concerns, here’s an incredible inkind donation success story.
A tiny nonprofit was launching a capital campaign to buy land and build a modular structure to meet the needs of the immigrants they served. They needed a hospitality house where family members could stay while visiting a loved one awaiting deportation at an isolated detention center in rural Georgia.
The organization had outgrown the one-bathroom rental house they had used for several years. Although the Board wished to remain a small organization with a small budget, they saw no way around their need for a bigger house.
Buying land in a small town can require patience, and the Board’s offer to buy land for a modular hospitality house stalled.
Then, out of nowhere, a television personality asked her network to buy the organization a house … and the network said yes!
The new hospitality house opened three months later. Five bedrooms! Four bathrooms! Bigger, more comfortable, and homier than the modular structure the Board originally envisioned.
The value of the gift was more than $175,000, far exceeding the Board’s annual budget at that time of $99,000. The capital campaign became a capacity-building campaign and the house now more than meets the needs of the people the organization serves.
Creating a Process for Inkind Donations
Being open to inkind gifts means being flexible, being satisfied with something that’s close to what you want but not exactly right, and being offered items your organization does not need.
To successfully leverage inkind gifts as a slice of your fundraising pie, create an easy process for prospective donors to understand your organization’s needs so you can easily accept things you can use and decline those you can’t.
Without a process, you may end up fielding offers of things you do not need and feeling obligated to accept them. Because, if you turn down an inkind gift, you may feel like you are turning down a donor trying to engage with your organization.
By tackling inkind gifts in a way that focuses on your organization’s current needs, you can engage with donors in a positive way, even if their offer of a riding lawn mower is not something your organization needs at the moment.
A system for accepting inkind donations makes it easier for you to manage the process.
The Bottom Line
By going after inkind donations in a strategic way, you may be able to get lots of products and services donated that you would have otherwise paid for.
It’s a good idea to include Asks for inkind donations in your annual fundraising plan.
When you get inkind donations, you’ll have more money to fund the biggest line item in most nonprofit budgets: salaries. This is super handy if your nonprofit is just getting started!
Inkind donations are not the solution to all your organization’s money struggles, but they are worthwhile to go after to maximize donor engagement and raise more so you can do more.
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