What is an in-kind donation? Guide for nonprofits

These kinds of gifts can be just as powerful as money, sometimes even more. They help stretch your budget, build community ties, and make your mission more doable day to day.

But figuring out what counts as an in-kind gift, how to ask for one, and what to do once it’s in your hands? That’s where things can get tricky. And if you’ve ever found yourself staring at a pile of donated items wondering how to value them or whether to accept them at all, you’re not alone.

What is an in-kind donation?

An in-kind donation is any gift your nonprofit receives that isn’t money. Think donated office furniture, pro bono legal help, free printing, or even snacks for your volunteers. If it’s something you’d normally have to pay for, and someone gives it to you for free, that’s an in-kind donation.

These donations can be goods, services, or even someone's time and expertise. A local business might donate supplies for your fundraiser. A photographer might offer free headshots for your staff. Or a volunteer might lend their graphic design skills to help with your next campaign.

What makes in-kind donations special is they help your team do more with less. You get real value, just not in cash. And when these gifts are planned well and tracked right, they can stretch your budget, deepen donor relationships, and open doors to new kinds of support.

Types of in-kind donations nonprofits can receive

In-kind donations come in all shapes and sizes. Some are easy to spot, like a stack of donated books. Others are less obvious, like someone offering free consulting or web design help. All of them can support your mission, if you know how to use them.

Here are the main types:

Goods: This includes physical items like food, clothing, office supplies, computers, or even furniture. These are usually things your team can use directly or pass on to the people you serve.

Services: When someone donates their time and skills, that counts too. A local lawyer helping with contracts, or a plumber fixing a leak for free, those are in-kind services.

Expertise: Sometimes it’s not just labor, but deep know-how. Think of a marketing strategist helping you map out a campaign, or an IT expert setting up your donor database.

Cash equivalents: These are things like gift cards, airline miles, or prepaid services. They’re not cash, but they work like it in practice.

Space or equipment use: If someone lets you host your event in their venue at no cost, or borrow gear you’d normally have to rent, that’s also in-kind.

Each of these kinds of gifts can be incredibly valuable, but they also come with different things to consider, like value, usefulness, and timing.

Benefits of in-kind donations for nonprofits

Let’s be honest, running a nonprofit means stretching every dollar. That’s where in-kind donations can be a total game changer. They help fill the gaps when your budget says “no,” but your mission still says “go.”

Here’s what we’ve seen in-kind gifts do for organizations like yours:

Save money on essential needs

Instead of spending cash on supplies, services, or equipment, you can use in-kind donations to cover those costs. That means more of your actual budget goes toward your programs and people.

Boost your capacity without adding staff

When professionals donate their time, think IT, legal, design, or event planning, you gain high-level support without hiring anyone. That kind of help can move your whole mission forward, fast.

Build stronger community ties

Accepting in-kind gifts gives local businesses, volunteers, and donors a new way to be part of your work. It turns one-time supporters into ongoing partners, and shows people their non-cash contributions still make a real impact.

Grow your credibility and professionalism

Let’s face it, showing up with polished materials, high-quality event gear, or expert support makes your nonprofit look and feel more prepared. That builds trust with your donors, board, and community.

Create long-term impact through recurring support

In-kind donations often lead to deeper relationships. Someone who starts by donating goods might later offer their services, or even become a major cash donor.

The bottom line? In-kind giving isn’t just about getting free stuff. It’s about unlocking resources that help you grow, lead, and serve, without draining your budget.

Benefits of in-kind donations for donors

Giving doesn’t always have to mean pulling out a checkbook. A lot of people and companies want to help, but they might be short on cash or looking for a different way to give. That’s where in-kind donations open the door.

Here’s what’s in it for your donors:

A meaningful way to give what they already have

Whether it’s extra inventory, unused space, or a skill they use every day, in-kind giving lets donors contribute without spending new money. It turns what they already have into real impact.

Tax advantages for many kinds of gifts

In a lot of cases, in-kind gifts can be tax-deductible. As long as the donation meets the right guidelines and is properly documented, donors can often write it off. (You’ll want to make sure they talk to a tax advisor, though.)

Feel-good community impact

For businesses especially, donating goods or services helps show they care. It’s good for their public image, and even better for their local community. It’s a simple way to live out their values while helping causes they believe in.

A foot in the door for deeper engagement

Sometimes, giving a service or donating items is just the first step. That donor might come back to volunteer, become a sponsor, or give financially down the road. In-kind giving can be the start of something long term.

For many donors, it just feels good to give something tangible. And when they see that gift being used, and making a real difference, they’re more likely to come back and do it again.

How to solicit in-kind donations

Asking for in-kind donations can feel a little different than asking for money, but it doesn’t have to be awkward. In fact, it’s often easier. People love to give when they know exactly how they can help. You just have to make it clear, easy, and specific.

Here’s how we’ve seen nonprofits do it well:

Start with a wish list
Make a simple, public list of what your organization needs. Be specific. Don’t just say “supplies”, say “500 notebooks for our after-school program” or “printing services for event flyers.” People can’t help if they don’t know what you’re looking for.

Reach out to your network first

Think about your board, volunteers, friends, and local businesses. Someone already in your circle might have exactly what you need, or know someone who does. Personal asks almost always work better than cold calls.

Make it easy to say yes

When you ask, include all the info up front: what you need, when you need it, how it will be used, and where to drop it off (or whether you can pick it up). The less work they have to do, the more likely they’ll say yes.

Match the ask to the donor

A law firm probably isn’t going to donate event snacks, but they might offer legal help or printing services. The better your ask fits their business or skill set, the more likely they’ll see the value and want to be part of it.

Show them the impact

Don’t forget to explain how their gift will help. “Your donated laptops will help students complete their college applications” is way more powerful than “we need laptops.”

One more tip? Let Harness help you streamline the whole thing. With built-in donation tools, forms, and tracking, we make it easy for people to give, and for your team to manage it all without the spreadsheet headaches.

Creating an in-kind gift acceptance policy

Not every donation is a good fit, and that’s okay. A gift acceptance policy helps your nonprofit say “yes” to the right things and “no” when it makes sense. It’s not about being picky. It’s about protecting your time, your team, and your mission.

If someone offers you a donation that’s too hard to store, too expensive to fix, or just doesn’t align with your work, a clear policy gives you a kind, professional way to say no, and avoid awkward conversations later.

Here’s what a solid policy usually includes:

What types of gifts you accept

This is where you spell out what your nonprofit is looking for, goods, services, space, equipment, expertise, and what types of donations you can’t accept.

The process for reviewing gifts

Who on your team decides if a gift should be accepted? What do you check for, like condition, timing, safety, or legal restrictions? Writing this down keeps things consistent and fair.

Any restrictions you won’t take

Some gifts come with strings attached. Your policy should clearly state whether or not you accept gifts that limit how, when, or where they can be used.

How you value and acknowledge gifts

This helps you stay aligned with IRS rules (more on that later) and sets expectations for your donors about receipts, acknowledgments, and public recognition.

A polite opt-out

Sometimes, the answer is “not right now.” Your policy gives you a gentle way to turn things down without burning bridges.

Writing your policy doesn’t have to be complicated. Even a one-page guide can make a big difference. And if you’re using Harness, we can help you create and track these guidelines so every team member is on the same page.

How to record and report in-kind donations

When someone gives your nonprofit a cash donation, it’s pretty straightforward, you log the amount, send a thank-you, and you’re done. But with in-kind donations, there’s an extra step: figuring out how much the gift is worth and how to report it correctly.

Here’s how to keep things clean and compliant:

Start with fair market value (FMV)

This is what the item or service would cost on the open market. For example, if someone donates chairs that would normally sell for $50 each, and they give you 10, the FMV is $500. Services can be trickier, only certain professional services like legal, accounting, or medical work can usually be counted.

Keep clear records

Log what was given, who gave it, when it was received, and how you determined the value. Good records help you stay transparent with your team, board, and auditors. It also helps during tax season.

Acknowledge the gift properly

You should send a thank-you letter that includes a description of the donation, but leave the value out unless it's something your donor needs for tax purposes. For services, be clear that the donation is non-cash and may not be deductible.

Report on your IRS Form 990

If your nonprofit files a Form 990, most in-kind gifts need to be listed there. The rules are different depending on what type of gift it is and how much it’s worth. This is where having an accountant, or a platform like Harness, can really help.

Use systems that support donation tracking

Spreadsheets can only take you so far. With a platform like Harness, you can centralize donations, track FMV, automate thank-yous, and pull reports when you need them.

Bottom line? If it’s worth receiving, it’s worth recording right. Getting this part right protects your nonprofit, and shows your donors you take their gift seriously.

Stewardship and donor recognition for in-kind giving

When someone gives you something valuable, whether it’s a box of supplies or pro bono consulting, saying “thank you” is just the beginning. Stewardship is about showing donors they matter, and that their gift is making a real difference.

And here’s the thing: people who feel seen and appreciated are more likely to give again.

Here’s how to do it well:

Send a timely thank-you

Whether it’s a handwritten note, a quick email, or a formal acknowledgment letter, the sooner the better. Let them know what they gave helped and that your team noticed.

Share the story

Got a donor who gave winter coats? Snap a photo of those coats in action and share it. If someone donated a service, tell them how it saved your team time or helped your mission shine. People love seeing the results of their giving.

Offer public recognition when it fits

List their name in your newsletter, tag them on social media, or mention them in your annual report (with their permission). It’s a simple way to say thanks and show others that in-kind giving matters.

Build the relationship, not just the moment

Check in later, maybe months down the road, to let them know how their gift continued to make a difference. It’s also a good time to invite them to an event, volunteer opportunity, or future campaign.

Open the door to deeper engagement

An in-kind donor could be your next board member, recurring donor, or fundraising champion. Keep them in the loop and make them feel like part of your team.

The goal is to make every in-kind donor feel just as important as a cash donor, because they are. And with Harness, you can keep track of who gave what, send automatic thank-yous, and nurture those relationships over time.

Sector-specific insights: how in-kind donations differ by cause area

Not all nonprofits need the same kinds of support. What works great for one organization might not be helpful, or even usable, for another. That’s why it’s smart to think about in-kind giving through the lens of your specific cause.

Here’s what we’ve seen across different sectors:

Healthcare organizations

Hospitals, clinics, and health nonprofits often need medical supplies, hygiene kits, or specialized equipment. Donated professional services, like dental care or mental health support, can also be incredibly valuable. Just be sure anything donated meets safety and compliance standards.

Education and youth programs

Schools and after-school programs thrive on donated books, art supplies, technology, and even snacks. Volunteers who tutor, mentor, or help with enrichment activities are also a huge help. Services like printing or IT support can save time and money, too.

Environmental groups

In-kind gifts might look like access to land, donated tools, or help with clean-up efforts. Professional services like grant writing, photography, or GIS mapping are often overlooked but very impactful.

Arts and culture nonprofits

Think venue space, costumes, instruments, or even catering. For arts-focused groups, creative professionals, like set designers, photographers, or video editors, can be some of your most powerful in-kind supporters.

Animal welfare organizations

Shelters and rescues often benefit from donations like food, bedding, cleaning supplies, or veterinary care. Transport services and donated storage space also come in handy more than people realize.

Each sector has its own rhythm and needs. When you tailor your in-kind strategy to your mission, you don’t just accept “stuff”, you invite support that fits, helps, and lasts.

Tools and templates to manage in-kind giving effectively

In-kind donations are a huge help, but they can also become overwhelming if you don’t have a system in place. Between tracking what’s been given, sending thank-yous, and making sure nothing falls through the cracks, it’s easy to feel buried.

Here’s how to keep it simple and stress-free:

Inventory and tracking tools

Use tools that let you log every donation, what it is, who gave it, when it arrived, and how it’s being used. Even a basic spreadsheet can work, but a platform like Harness makes it easier to stay organized and avoid double-dipping.

Gift acceptance policy templates

Don’t start from scratch. Use a simple template to outline what your nonprofit will and won’t accept. Make sure your whole team is on the same page, so no one ends up saying “yes” to something you can’t actually use.

Thank-you letter and acknowledgment templates

Have a few versions ready to go, for donated goods, services, and larger gifts. That way you can move fast and still make it personal. A quick thank-you goes a long way.

Donor outreach email scripts

Need to ask a business for supplies? Or invite a volunteer to share their skills? Email scripts can save you time and take the pressure off. Just plug in the details and hit send.

Valuation reference sheets

Keep a simple guide on hand to help you estimate fair market value for common donations. This can be a huge help when it’s time to report gifts for tax or financial purposes.

When your tools are ready and your templates are in place, your team can say “yes” to the right gifts without scrambling behind the scenes. And if you’re using Harness, most of this is already built in, so you can focus on impact, not paperwork.

Grow your impact

In-kind donations aren’t just about saving money, they’re about opening doors. Every donated item, service, or skill you receive is a chance to do more of what matters, without stretching your budget thin. Whether it’s a volunteer’s time, a company’s surplus supplies, or a pro bono service, these gifts help you serve your community in real, lasting ways.

The key is knowing what to accept, how to ask, and how to manage it all without burning out your team. When you have a plan, and the right tools, you can turn everyday generosity into long-term momentum.

And you don’t have to do it alone.

Harness helps nonprofits like yours turn in-kind giving into a simple, sustainable part of your fundraising strategy. From tracking gifts to thanking donors, we’ve got the tools to help you grow your impact.