What is an in kind donation, and can you accept them?

donation gift acceptance
collocations with donation

There’s typically a specific application process for each available grant, and the selected nonprofits often receive generous sums to put toward a particular project or program. A corporation may decide to offer professional services to a non-profit organization and then categorize it as a donation. For example, a publishing company may decide to publish newsletters for a church without charging them. Another example of services that are in-kind donation is a transport company that offers free transport services to a children’s home. The terms “United States,” “State” and “International Organization” shall have the meanings set forth in Code Section 7701 or successor provisions. Donor-imposed restrictions may affect the usage of the donated goods, but not their fair market value.

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As more and more companies continue to acknowledge their corporate social responsibility, they are also recognizing the benefits of participating in gifts in kind programs. In addition, with cash donations on the decrease over the past several years, offering donations of goods and services is a way for corporations to continue pursuing their philanthropic goals. A nonprofit’s board of directors is often heavily involved in the fundraising process. Board members can provide connections and introductions to corporate partners, major gift donors, and other sources of revenue. Nonprofit organizations should have a gift acceptance policy that will help the staff know which types of gifts are acceptable and which ones need further evaluation. Every non-cash gift should be evaluated to determine its usefulness to the organization before it is accepted.

Arguments against gifts in kind

It also outlines some of the legal obligations that accompany some types of gifts. By providing the guidelines, you can avoid certain contributions altogether or inform supporters of the stipulations that accompany specific types of gifts. To promote charitable gifts, reach out to businesses and individuals in the community. Create a wish list of needed items and share it on social media, email, and newsletters. After contacting donors about donating items, follow up with a phone call and express gratitude.


llc accounting donations are contributions that a donor makes to a nonprofit cause via the internet. This giving method has quickly become the new norm due to the fact that nearly everyone is online in some capacity nowadays. Companies tend to issue grants via their corporate philanthropy or corporate social responsibility offices or through a corporate foundation. Special rules apply to donations of certain types of property such as automobiles, inventory and certain other readily valued property. For more information, refer to Publication 526, Charitable Contributions.

Long story short, that free vehicle given to us ended up costing the church thousands of dollars in repairs, upkeep, and insurance. Once the transmission went out, we quickly sold the vehicle and never looked back. What the donor thought would be a blessing to the church quickly became a huge financial burden.” In-kind donations are often a simpler way for businesses to give because they don’t have to worry about their cash flow.

In-Kind Donations: The Ultimate Guide for Nonprofits

How is this handled when the in-kind donor is an event sponsor AND as a participant, receives goods/services from the event? Since the letter needs to list the tax-deductible amount, doesn’t the value of the in-kind donation need to be included? This holds true for donated goods received that are part of your mission, such as food donated for your community kitchen.

  • The combined value of the funded and in-kind contributions to the project was $1,150,000.
  • The IRS allows you to deduct the fair market value of property donated.
  • Not having a designated team or person that handles all incoming donations means that you will bring in A LOT of unwanted goods and services.
  • Individuals often delineate planned gifts in their wills or bequests.
  • If a business already has a philanthropic framework, it will be much easier to solicit donations from it.

If you work at a company that has surplus goods or can provide services to a nonprofit, consider reaching out to an organization in your community and asking what they need. Nonprofits must record and report in-kind donations properly in compliance with GAAP, state laws, and the requirements of lenders, grantors, and other key stakeholders. Recent GAAP changes dictate nonprofits must transparently include gifts-in-kind and other non-cash contributions in their financial statements.

donation in kind definition

On top of having guidelines for the services and items you accept, it’s good to have guidelines for who can approve of these donations. Limit your donation acceptance to a person or team that knows your mission and guidelines for donations. In kind donation letters are a popular fundraising tool used to reach prospective donors and ask for donations. They can be especially effective when you have a specific campaign, fundraising event or new program launching that requires specific items. Even though they aren’t cash, in-kind donations can be a game-changer for many nonprofits!

When your donors work for companies that offer these initiatives (which, chances are, they do!), eligible individuals can request that their employer doubles their gift to your nonprofit. An in-kind contribution form is a document that the donor fills out to tell what they are donating and how much it costs. All types of donations, whether cash gift or items like clothing, furniture and cars, require the donor to fill out an in-kind contribution form.


Professional services can be given in kind to nonprofits that would otherwise need to pay for that same service. For instance, accounting services, lawyer services, graphic design, or web development can all be given in-kind by a generous professional. Donation receipts are required for single donations of $250 or greater.

You may already have a gift acceptance policy for cash gifts, but you will also need a gift acceptance policy for in-kind donations as well. This will help your nonprofit ensure that the items and services you receive are used for and align with your organization’s mission. Keep in mind that your gift acceptance policy likely isn’t just for in-kind donations.

If you get tired of writing endless thank-you letters, Keela has just the thing for you. Let your donors know how much you appreciate them with these 7 Perfect Thank You Letter Templates. Second, identify your organizational needs and be clear about them. This will provide you with direction regarding what you will actively solicit and what you will not accept. The last thing you need is someone dropping off an unsolicited bag of hand-me-down clothes at your doorstep. As you know by now, in-kind donations come with their own set of benefits, drawbacks, rules, and strategies.

Pledge Fundraising

Your nonprofit doesn’t need to rely on random acts of kindness to receive in-kind donations. Just like standard contributions, you can cultivate these contributions and tell supporters exactly what it is you need from them. Finally, some states require nonprofits to record their in-kind donations, so be sure to check your state guidelines to see what your nonprofit requirements include. Many large nonprofits have third-party firms facilitate their charitable solicitation registration process for them, but an organization is able to complete the process on their own. Again, the process for actually filing the required forms varies from state to state as well.


A desire to help is one of the top reasons people give to nonprofits. Individuals like to help the people in their communities and around the world. If you decide to apply for several different grants during the same calendar year, you can put your organization on a grant application calendar. Donations made by direct mail are usually made in the form of checks.

As mentioned before, working computers and office equipment for nonprofits make terrific in kind donations. So do legal and accounting services for these organizations, since these services can become very costly, eating into their operational budget and lessening the impact of their cash donations. In effect, any donation that leads to a reduction in overhead costs for a nonprofit is a good donation. If you work at such an organization, take time to reach out to corporations that may be able to assist in the areas that you need; you may be surprised to see who feels charitable and is willing to help.

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Recurring donations are contributions that a donor elects to make on a regular basis. Planned gifts are donations set aside in the present that are then made in the future. Individuals often delineate planned gifts in their wills or bequests.

The application process for a community foundation grant can take months. You’ll want to make sure that you have a point person to head up all of your application processes and can communicate with representatives at the foundation. Some foundations have a rigorous application process, while others will award the grant amount to a nonprofit that they choose internally. For instance, during a charity auction, fundraising dollars might come in the form of winning bids, whereas at a gala, donors might text in their donations or contribute via a donation kiosk. Recurring donations give donors the ability to automate their contributions.

How Nonprofits Can Raise Money From Individuals

However, for big companies, be aware that nonprofit competition for donations can be quite fierce. In-kind donations include physical property (stuff!), intangible property , services and rent-free space. Anytime someone donates an item or shares their professional expertise, you’re most likely dealing with an in-kind donation. For larger gifts , write a one-on-one letter to your supporter who might have it available. Reach into your donor database to see who might be able to and interested in making these contributions, then write a specifically tailored letter to them just like you would a major monetary donation.

You’ll want to start by formalizing your request with a letter sent to the CSR or corporate philanthropy office. If a company has specific guidelines for requests for in-kind donations, make sure that you follow them closely to put your best foot forward. Matching gift programs allow companies to exercise their corporate philanthropy initiatives while engaging their own staff members. They also help donors give twice as much to the causes they care about without opening their wallets a second time.

It has been argued that donated goods are much less susceptible to becoming graft because physical goods are more tangible than money. Basically, it means that the value of an in-kind donation is the resale value of the good or service at the time of acquisition. If you decide to help Senior Care, your contribution will be much more than the equipment.

Still, there are several stipulations and requirements when it comes to whether or not a donation is considered to be deductible that filers need to keep in mind. Additionally, some states require nonprofits to register and report their financial results if they have assets that are tied to a charitable trust. Make sure that your stewardship activities are in line with donors’ relationship with your nonprofit and their past involvement. All in all, these efforts can help you approach donor relationships more proactively, resulting in elevated long-term support for your mission and stronger connections with donors.

In-kind donations usually come from companies with whom the nonprofit has a standing partnership or relationship with. However, if there is an open application process, the nonprofit should attempt to apply for the grant . Buildings on college campuses are frequently named after generous donors — if you give millions of dollars to your school, they might name the new library after you, crediting you as a donor. Another kind of donor gives blood that can be used for transfusions, or agrees to donate organs after his or her death.

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