What Is an In-Kind Contribution?

by Audrey Farley
In-kind contributions help charities and non-profit organizations reach their fundraising goals.

In-kind contributions help charities and non-profit organizations reach their fundraising goals.

In-kind contributions, or gifts-in-kind, are non-monetary donations. These kinds of contributions, which may be small or large, are often assigned a financial value for the sake of tax, accounting and legal purposes. Two types of in-kind contributions exist: goods and services.

Donors

The donors of gifts-in-kind may be individuals or corporations. Individuals often donate small in-kind gifts such as food, blankets, clothing, books, toys, educational materials, personal hygiene items or used furniture. Businesses often make in-kind contributions on a larger scale. For instance, a car dealer may donate a vehicle to a charity or organization. An office supply chain might donate a piece of office equipment that the recipient organization or campaign can use. A painter might provide paint or brushes for a new community center building.

Recipients

The recipients of in-kind contributions are often charities, non-profit organizations, schools, community centers and political campaigns. Such recipients use in-kind gifts or services and can eliminate the associated expenses from the budget. Sometimes recipients publish a wish list of wanted items. For instance, a YMCA branch might request gym equipment, benches for an outdoor garden, a school bus or other large gifts. Businesses respond to wish list requests by giving in-kind donations.

Services

Professional or personal services may be given as in-kind contributions. For instance, a financial firm or law office may offer a charity a certain number of hours of free consulting. As another example, a bakery may offer to cater a charity event. Sometimes donors offer service in-kind contributions for auctions or lotteries to raise money for a non-profit initiative. For instance, a spa may offer two hours of spa services to be auctioned to charity event attendees.

Tracking Gifts

For tax, financial accounting and legal purposes, in-kind gifts are assigned a monetary value. This enables donors and recipients to track the gifts. For instance, political campaign in-kind contributions are regulated by the Federal Election Commission. Recipients are responsible for providing donors with a receipt for tax purposes.

Etiquette

Proper etiquette requires recipients of in-kind contributions to acknowledge gifts and, in some instances, to treat in-kind gifts as financial gifts. Recipients should thank in-kind contributors for goods or services donated and publish notice of such contributions along with any notices of financial donations. For instance, if donations are announced in a newspaper, in-kind contributions should be published in a special category for in-kind contributions or in the category of amount that the gift meets.

About the Author

Audrey Farley began writing professionally in 2007. She has been featured in various issues of "The Mountain Echo" and "The Messenger." Farley has a Bachelor of Arts in English from the University of Richmond and a Master of Arts in English literature from Virginia Commonwealth University. She teaches English composition at a community college.

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