Although nonprofits often focus on cash donations, gifts may come in many forms. If your nonprofit receives in-kind contributions, here's how to know their value and manage them. Tangible goods include things like equipment, books, cars, clothing, furniture and supplies. Goods may also be intangible, such as advertising, patents, royalties and copyrights. Goods may be used, surplus, new or even loaned. In-kind services are professional services donated by groups such as corporations, small businesses, vendors, colleges, individual professionals or tradespeople.
Your organization, for example, could be given transportation or publishing support. An in-kind donation involving time occurs when people give their time or for payment by a third party on the nonprofit's behalf.
An employer might also lend paid employees to help support a nonprofit. In-kind gifts can be valuable if donated items are central to your organization's mission, such as providing clothing for the homeless.
Other in-kind gifts can help your nonprofit provide its programs and activities at a reduced cost. In-kind gifts may even free up your nonprofit's cash for operating essentials, such as payroll taxes. Beyond revenue and cost savings, many charities find in-kind contributions to be an effective way to cultivate supporters and build capacity. When your nonprofit receives an in-kind gift, you must record it as revenue using the fair value of the gift and noting the date of receipt.
Fair value is the price that you'd receive to sell an asset or be paid to transfer a liability. You can determine the worth of a gift—or corroborate the value suggested by the donor—in a number of ways. For example, you might:. Once you choose a valuation method, apply it consistently and disclose it within your financial statements. Oftentimes, ineffective donations result from a lack of communication between donors and organizations, or a misunderstanding of a nonprofits needs and mission.
A donation may also not be a good match if the cost of shipping the donated goods to an overseas location is greater than the cost of sourcing the same goods locally.
In this case, a cash donation is definitely preferable. 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. 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. Remember, communication is the key to ensuring a good donation. Again, if you work for such an organization, be sure to keep a list of those items which will do actual, measurable good on your website.
A clothing company or department store, for example, could do well to donate socks to charities that help the homeless — socks are one of the most needed, yet least donated, items for shelters.
Typically, any gift given out of a desire to be seen as charitable without thought as to what will actually help is a bad gift. This can sometimes come down to the nature of the gift itself — and sometimes to the quantity!
For example, in a disaster situation, a certain amount of clothing and medicine may be incredibly helpful. But after a certain point, additional donations have the power to not only fail to help, but become a burden to the recipients.
Thought should always be given to the actual effectiveness of a donated item. When in doubt, ask. Types of Donations. Types of Donations 9Health gladly accepts a wide variety of donations from our charitable donors. Planned Gifts: Remember 9Health with a direct bequest in your will or through a planned financial vehicle.
Stocks and Securities: Donate stocks or securities. In order to avoid transportation costs that can lower the impact of your donation, look first in your local community to find a charity to support with your noncash contribution. Call around and ask charities if they accept the kind of items you are looking to donate, and if they don't find out if they have any suggestions of a charity that does. You can use Charity Navigator's database to find a charity in your local area that might be interested in donated goods by using our advanced search feature and searching for charities within your state, city, or within a set radius from your zip code.
Within the results list you can also click on "Re-sort by: Overall Rating" to see these charities listed from highest to lowest rated. Once you see a few efficient charities that you think may be interested in your donated goods you can use the contact information provided on their ratings page to discuss with them how you might be able to arrange such an donation.
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