A donor calls with an offer: they’d like to donate their professional services, or inventory from their business, or use of their vacation property for a staff retreat. These gifts-in-kind can be genuinely valuable—or they can create headaches that outweigh their benefit.
The Valuation Challenge
The IRS has specific rules about how non-cash gifts must be valued and acknowledged. For gifts over $5,000 (excluding publicly traded securities), donors need a qualified appraisal. The organization’s responsibility is to acknowledge the gift without stating a value—that’s the donor’s responsibility to determine.
But the practical challenge is often more basic: is this gift actually useful to us?
Questions to Ask
Before accepting a gift-in-kind, consider:
- Do we need this? A donated service we wouldn’t otherwise purchase isn’t really saving us money.
- What are the hidden costs? That donated venue might require significant catering, transportation, or setup expenses.
- What’s the opportunity cost? Time spent coordinating a complex in-kind gift is time not spent on cash fundraising.
- What are the donor’s expectations? Sometimes the “gift” comes with strings attached.
Having the Conversation
When a donor offers a gift-in-kind that doesn’t fit your needs, honesty is the best policy. Thank them for thinking of you, explain what you’re looking for, and redirect if possible: “We’re so grateful you want to support us. Right now, our greatest need is actually for unrestricted cash to support our programs. Would you consider a financial gift instead?”
Most donors appreciate the clarity. They want their generosity to matter—help them understand how it can.
