What does In-Kind Contribution mean?
In-Kind resources, or non-cash contributions, refers to any type of resource that is not money that your organization or group utilizes to get your work done. In-Kind can be provided internally by the organization/group itself or from outside the organization.
Examples of In-Kind resources are:
- Volunteer time (fundraising, outreach, labor, research, legal services, transportation, etc.)
- Any type of donation of materials/supplies (ie. computers, vehicles, office supplies)
- Use of office or meeting space without charge
- Advertising or photocopy services
- Furniture
- Food for a meeting
Why is In-Kind support important?
In-Kind support is important for many reasons.
In the context of writing grants, when you put together a budget, it’s important to include in-kind contributions (made by the organization itself or from other supporters). This is especially important for organizations that are new, have a small budget or are first-time grant seekers (or don’t have a long history of receiving money). This is because it shows your organization, even though you may not have a lot of cash, has invested in the work in a substantial way, has creative means of strengthening programs without money, and that you are invested in the work you are doing by gathering additional resources aside from money.
Sometimes, if a contribution or match from the organization is requested in order to receive a grant, In-kind contributions will count instead of, or in addition to, money.
How to receive In-Kind gifts/contributions?
- Keep a running list of needs your group/organization has so people know how to support you. Think of things like an amazon.com wishlist or a list that gets sent out on your monthly newsletter or posted to your social media periodically.
- Keeping a list will also help you distinguish things that truly are helpful and needed for your work versus taking on a bunch of stuff you don’t really need.
- By keeping a list, you can also use it to identify groups and individuals to approach and see if they would like to donate something.
How to value and manage your In-Kind gifts/contributions?
Keep a spreadsheet to track what in-kind gifts your organization/group contributes and/or receives. This helps build the organization’s capacity to manage resources and inventory. It also helps put value on an item/service/resource so you can reference them later for tax purposes, budgeting or writing grants. In addition, it demonstrates to funders and community supporters how you are able to carry out your projects/work.
Tracking In-kind donations:
- Create separate spreadsheets for internal + external contributions. Track who gave you the contribution, the date it was given, a description of the item(s)/contributions, and consider adding how the organization utilized the contributions (could be helpful for accounting later).
- Give the item/service/resource a monetary value. You can look up the average cost of a service or item on the internet.
- Don’t forget to list and value your people-power (volunteers)! The current average in-kind value for one volunteer hour is $25.43. If someone is volunteering a general task this is the number you should use. If someone is performing a specialized skill (ie. website development, legal advice, etc.) the volunteer hourly rate should reflect the cost for that specific service.
- Consider keeping track of donations with a receipt or invoice system. This will also help whoever made the donation/contribution document them on their taxes if you are a 501 (c)3 or have a fiscal sponsor (donations are only tax deductible for the person/business giving them if they give them to a registered non-profit/501(c)3 organization).
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