March 2004

Public charities depend on generous donations from private citizens and businesses to continue their good works. Not all the contributions that keep these organizations running, however, are cold, hard cash. "In-kind giving" refers to contributions of goods and services that are of value to a nonprofit organization. Businesses do it, corporations do it, and so do individual donors.

February's Question of the Month asked newsletter readers if they had ever made an in-kind charitable donation. The vast majority of responding readers had, and they shared with us what they had contributed.

A partial list of donated items includes:

• Clothing
• House wares
• Tools
• Office supplies
• Toys
• Games
• Books
• Medical supplies
• Silverware
• Dishes
• A freezer
• A riding mower
• Hotel rooms
• Toiletries
• Art
• Fundraising reference publications
• Land
• A digital camera
• Dog and cat food
• A snow plow
• Oriental rugs
• Printing services
• Medical equipment
• Canned food items
• Shares of stock
• A utility trailer
• Cell phones
• School supplies
• Decorations
• A grain mill
• A vacuum cleaner
• Firefighter protective equipment

You get the idea. If you've got it, there's a chance there's a charity out there that needs it.

Many readers emphasized the satisfaction they received from passing useful items they no longer needed on to charities. Not only were they helping a good cause they were recycling as well. As Berni Bishop of the Western Pennsylvania Humane Society put it: "It's a great way to help the economy and sometimes the ecology—because otherwise some items might just end up prematurely and unnecessarily in a landfill."

Other nonprofit representatives also voiced their approval:

Laura Renner of Healing the Children California explained, "It's an awesome way for people and organizations to be able to contribute. We (Healing the Children California) rely heavily on medical supplies for our medical missions to be donated by vendors. We simply could not help all these children without this type of donation!"

"Greater Boston Aid to the Blind has earned over $100,000 each year from unwanted vehicles," wrote Robin S. Fine, "and that's not an easy number to replace with other fundraising programs."

Readers also offered some good advice to individuals who were considering making an in-kind gift:

Ask before you give. Don't assume a charity will welcome an in-kind gift simply because it has value. You should contact the organization to make sure they can make good use of your contribution. If not, find an organization that can. These days, many nonprofits publish a "wish list" of specific items they need.

Place an accurate value on your donation. Beth Klug of Omaha, Nebraska advises: "Keep a record of what you gave—document with photographs if possible. Let the organization know the value of the in-kind donation, as they will need that information for grants, etc., when they must specify if they receive in-kind donations and the value of these in-kind donations." Such record keeping is for your benefit as well as the charity's, especially if you intend on writing off your donation. IRS Publication 561 explains how to determine the fair market value of your donation. If you're thinking about donating a vehicle, keep an eye out for possible new legislation that may tighten valuation regulations.

Don't assume your donation is tax deductible. Not every in-kind donation is tax-deductible. Donated services, although often welcomed by organizations, generally cannot be written off. IRS Publication 526 outlines what types of donations can be deducted and how to claim a deduction.

In-kind giving is not a substitute for writing checks—nonprofits often rely on the flexibility of unrestricted cash donations—but it can be an effective and creative way of supporting charitable organizations.

Patrick Ferraro, 2004
© Philanthropic Research, Inc.

Patrick Ferraro is the Editor of the GuideStar Newsletter.