Definition of In-Kind Grant Contributions
Several types of support are available for nonprofit organizations, including in-kind grant contributions. Grants provide a large portion of revenue for charities and nonprofits because of tax shelters created by the Internal Revenue Service. In-kind gifts reduce budget expenditures and help sustain nonprofit organizations.
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Gifts in Kind
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An in-kind grant contribution (gift in kind) is when a foundation or other entity contributes a good or service in lieu of providing monetary grants. In-kind contributions support the programs or daily operations of an organization. Such contributions include products, supplies and equipment, the use of corporate services or facilities and professional services or expertise. In-kind donations build relationships within an organization as the donor can support the mission and programs without investing cash. Keeping a donor informed of what is done with their donation encourages them to take on a greater role in programs.
Value
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Normally, in-kind contributions are goods or services that an organization would need to purchase and are donated instead. The value of contributions should be reported as the amount your organization normally pays.
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Budget
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In-kind gifts are important to include in budgets since they are considered revenue even though it is not a monetary contribution. You should keep a line item open for income, as well as expenses if the contribution is used.
Clearinghouses
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Several clearinghouses assist nonprofits in seeking in-kind donations and connect nonprofits with those seeking to donate. Donor databases provide a means of researching charities that provide in-kind gifts.
Considerations Before Donating
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Some organizations do not accept every gift in kind and gratefully decline the offer. Many organizations ask that you complete an in-kind donation form prior to providing the gift, so check with the organization you want to partner with to see what it requires. If you are interested in providing an in-kind contribution to a nonprofit organization, ask what its needs are and how you can help
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