In-kind donations are a great way to support a charity. If you are looking to support a charity there are a few ways to get involved. You can donate money to a charity to be used for expenses and programming. You can volunteer and get directly involved with the work of the organization. You can also look into joining the board of an organization to help advise them. But another way to support a charity that could be easier and make a big difference is through an in-kind donation.
An in-kind donation is when needed goods or services are given to a charity. In-kind donations are items that will be used directly in an organization’s programs or used by their staff. These can include household items, furniture, supplies and all types of other items. In-kind donations could also include goods that a charity can auction off at a fundraising event to raise money for their programs. These can include event tickets, a gift certificate or new merchandise. In-kind donations of services are ones that would directly benefit the charity, ones they would normally have to pay for. Examples of in-kind services include accounting help, legal assistance in helping a charity apply for tax exempt status, consulting services to advise charities, event space for the charity or for one their events, building or fixing something for a charity and many others.
In-kind donations can come from individuals, small businesses and larger corporations. Individuals will often donate excess items around their house while businesses and corporations will mostly donate the products that they produce or the services that they offer. In-kind donations are also making up a larger part of the overall giving from companies. According to a survey of Fortune 500 companies done by Committee Encouraging Corporate Philanthropy, as a percentage of total corporate giving, non-cash contributions grew in aggregate from 57 percent in 2007 to 69 percent in 2012.
There are benefits to in-kind donations for both individuals and companies that are donating and also for the charities that are receiving donations. One overall benefit for donating goods is that resources are shared and items are kept from being thrown out when they still have useful life.
How in-kind donations benefit charities
In-kind donations help charities in a few ways including:
- receiving needed items that can be used by their organization
- cost savings
- a way to meet and connect with new donors.
By receiving in-kind donations charities are able to save money that would have otherwise been used to purchase items. The greater the need for a donation and the actual cost of obtaining it, the greater the benefit and impact is for a charity.
Charities also benefit from in-kind donations because they are often introduced to new donors that are supporting their organization. This allows the charity to develop a relationship with the donor that could lead to further support in the future. A donor that gives their items to a charity becomes familiar with the organization and gains an understanding of how they use donations to further their mission. Donors may then be more willing to further engage with and support the organization in various ways by volunteering, telling people they know about the organization or support the organization by making a donation.
How in-kind donations benefit donors
In-kind donations benefit individual donors in a few ways that include:
- an alternative way for them to donate
- a way to recycle their goods
- the ability to receive a tax write off
Donors may not have the ability to donate money to a charity but can easily donate something they aren’t using anymore. A donated good can make a significant impact at a charity, as they might not have been able to purchase that item themselves. By donating goods to a charity, donors are able to recycle their items and have it be used directly by someone in need of that item. By donating to a charity instead of throwing an item out or recycling, the donation can be reused for its original purpose so it has the maximum effect and impact. Donating unused goods can also clear up space for the donor and help them clean their home. In-kind donors can receive a tax receipt for their donations when donating to a registered charity that is tax exempt. The donor is responsible for providing a fair market value for the in-kind donation, which will be used on the tax receipt provided by the charity. One important thing to know is that the value of donated time and services cannot be deducted. The IRS has published a helpful guide on claiming tax deductions from charitable contributions.
In-kind donations can also benefit companies as well. Companies often have excess inventory that they need to remove because it can no longer be sold at the original price. Instead of reselling the inventory at a fraction of the original selling price through liquidation, companies could see a greater financial gain through donating and receiving a tax deduction. Companies are able to reduce their storage costs, and clear valuable warehouse space. Donating Companies can also benefit from donating their inventory because they are becoming more socially responsible. This increases their brand image and could attract more consumers to purchase their products and attract better employees.
What Donors and Charities Can Do
Individuals can easily find unused goods that they can donate to local charities with needs for those items. According to an eBay survey the average U.S. household has 52 unused items around the house. These can include clothing, electronics, computers, sporting goods, toys and furniture. But in-kind donations aren’t just limited to those types of items. They can also include office supplies, silent auction items, pet supplies, tools and many others types of items. People can also help by donating their time and expertise in a certain area such as legal counseling, tax advice, handiwork or something else. Companies can consider the benefits of donating their excess inventory and develop an in-kind donation program. For donors the important thing is to make sure a charity is in need of your donation. You can often find what a charity is in need of by visiting their website and getting in touch with them. Donors can also make use of donation intermediaries, which can help with finding a charity that is in need of the donation and potentially with logistics in getting the donations to the charity.
Charities can make the community aware of their in-kind needs. Often donors aren’t aware that charities are in need of things and what their specific needs are. If donors know about the in-kind needs of charities they can look to see if they have the items or if they know someone who might have the items. Often times charities will make a wish list on their website of current in-kind donation needs or ones that are needed an ongoing basis. Charities can also use donation intermediaries to be connected to donations in a more efficient and easier way.
In-kind donations can have a substantial impact for charities. Whether it’s a new conference room table to facilitate meetings, a computer to help a teen do their homework or receiving legal advice to incorporate as a registered 501(c)(3). If you have something you are no longer using or skills that would be helpful to a charity consider making an in-kind donation!
Jesse Mavi is Director of Operations and Outreach at Zealous Good, an in-kind donations marketplace in Chicago. You can find Jesse on Google+ or Zealous Good on Facebook and on Twitter at @ZealousGood.