- Karen Eber Davis Consulting - https://www.kedconsult.com -

A Gift By Another Name: In-kind Income

Twice a year, Clothes to Kids, headquartered in Clearwater, Florida, provides thousands of low-income school-age children with five outfits. These school outfits include tops, bottoms, shoes, jackets, and accessories. Everything the children receive, except socks and underwear, is donated. Like Clothes-to-Kids, your organization may depend upon in-kind donations or it may involve only small but essential resources, like the volunteer labor of your board.

If you have been reading this series about nonprofit income sources, you may be surprised to find in-kind on a nonprofit income source list. After all, in-kind is not cash. Yet, its impact is huge. More importantly, looking at in-kind as a source can help your nonprofit to think differently. While money will work to solve your need, what you really need are the resources that money buys. Obtaining the right in-kind allows you to skip the cash step and obtain your need. (See the second equation below.) This article invites you to look at in-kind in fresh ways as a first step to maximizing it.

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Figure 1: Gifts of Money vs. In-kind

1. What is in-kind “income”?

In-kind is nonprofit jargon for gifts-in-kind. In-kind represents goods or services you receive for little or no cash. In some cases, in-kind includes resources you cannot buy, like the endorsement of a media star. All nonprofits receive this source of support, often in the form of donated goods, discounts, and services.

2. What are some other examples of nonprofits earning in-kind income?

3. What forms of support does in-kind take?

In-kind donations take five forms:

4. What about large sources of in-kind?

Good360 (formerly Gifts-in-kind International), Tech Soup, and the National Association for the Exchange of Industrial Resources represent several of the large international organizations developed to facilitate the exchange of in-kind goods. Tech Soup, for instance, provides nonprofits steep discounts on software. If your organization uses a lot of goods, check with these organizations.

5. Is this a common source of nonprofit income?

Yes; it represents one of seven sources of nonprofit income. (Read about the others here [1].) 

6. Besides the goods, services, and other help, what are the benefits of this source of support?

7. What are the risks?

8. What is your organization’s experience with in-kind?

Leaders need to learn about their nonprofits’ experience with in-kind. Starter questions include:

9. What is the role of the board?

The board’s role here involves oversight and resourcing including issues like:

10. How might your nonprofit identify new sources of in-kind?

In-kind as an “Income” Source

In-kind gifts are a wonder of the nonprofit world. No other sector enjoys and can take advantage of them like nonprofits. To take full of advantage of your in-kind opportunities, focus on what you need, explore how to fill those needs, take actions, and set up barriers to keep unwanted items out.

For more on nonprofits and funding opportunities, listen to our collection of audio downloads, especially Money-tastic #2: Nonprofit Income Opportunities [2] and Money-tastic #3: Creative Revenue Streams for Your Nonprofit. [2] Both are great ways to learn new income ideas to help your nonprofit.