When executed well, they work; 96% of nonprofits report their capital campaigns successful. But that success isn’t accidental. It comes from careful planning and a disciplined approach to fundraising.
While financial investment is the backbone of every capital campaign, there are moments when in-kind donations—contributions of goods or services—can support campaign progress in specific, strategic ways. When timed and managed well, in-kind gifts can reduce costs, engage local businesses, and reinforce your community’s investment in your mission.
In this guide, we’ll define in-kind gifts, explore when and where they can be most helpful, and offer recommendations for incorporating them into your strategy without compromising campaign integrity.
What Are In-Kind Gifts?
In-kind gifts are nonfinancial gifts of goods or services. They differ from monetary donations in that they provide tangible resources—either items or professional labor—that your organization would otherwise need to purchase.
Goods are what likely come to mind when you think of in-kind gifts. These donated materials or assets are typically physical items that benefit your organization. For example, if you’re running a capital campaign to fund a new building, you may collect in-kind gifts of construction materials, classroom furniture, or technology equipment donated for the new facility.
The other main type of in-kind gifts is services. Donors can contribute their time or expertise to your nonprofit by providing professional services. For instance, an organization launching a capital campaign to fund a new program may solicit pro bono web design services to develop a microsite for the program.
These gifts can be valuable—but only when they meet a real, defined need and do not compromise the campaign’s timeline, quality, or project scope.
When In-Kind Gifts Make Sense in a Capital Campaign
In-kind gifts are best positioned as supplements, not substitutes, and they should never take the place of a strong, relational fundraising foundation. But in the right scenarios, they can provide real value:
- In the public phase: Once your campaign’s financial foundation is secure, in-kind gifts can enhance visibility and participation. For example, a donor might underwrite the landscaping or donate seats for a new auditorium.
- For naming opportunities: Some in-kind gifts, like technology for a named classroom or equipment for a named studio, may be appropriate if they align with specific recognition opportunities.
Benefits of In-Kind Gifts
For nonprofit organizations:
- Offset campaign expenses. Nonprofit experts advise budgeting approximately 10% of your capital campaign goal for campaign expenses. Strategic in-kind gifts—such as donated services or materials—can help reduce that spend. However, it’s important to ensure each donation meets the same standards you would expect from a paid vendor. In-kind gifts should align with your gift acceptance policy and be accounted for per IRS and GAAP guidelines.
- Accelerated project timeline. In some cases, donated professional services or materials can help speed up project implementation, especially if the work or delivery fits within your existing project schedule.
- More opportunities for community partnerships. Local businesses may welcome the opportunity to contribute in a way that showcases their skills or products. When paired with visible recognition, like signage, social media, or event involvement, in-kind gifts can deepen relationships that support your organization well beyond the campaign.
For your donors:
- More giving options. Current philanthropy trends show that overall giving is on the decline, but nontraditional giving is on the rise. By accepting in-kind donations, you give donors another way to contribute to your campaign. This is especially relevant for business owners or professionals whose time or products serve your mission.
- Tax incentives. In-kind gifts may be tax-deductible, though valuation and documentation must follow IRS guidelines. Acknowledging this benefit clearly in your outreach and receipts encourages donors to contribute.
- Clear impact visibility. The everyday donor may feel like their contributions don’t actually matter. However, when they contribute in-kind gifts, they’ll better understand how their donations made an impact. For example, a donor who contributes school supplies for your new high school educational program knows that those supplies will go directly to the program’s beneficiaries. Post-campaign reporting can spotlight how those contributions helped keep costs low or accelerate completion.
How to Thoughtfully Solicit and Steward In-Kind Gifts
In-kind giving is not a plug-and-play strategy. It requires intentional planning, just like every other component of your campaign. Here’s how to approach it:
- Identify your needs. Proper nonprofit financial management for campaigns starts with understanding your needs and making a plan to fulfill them. Determine which items or services would actually reduce costs or improve outcomes, without creating complexity.
- Define your policies. Not every well-meaning gift is a good fit. Have a clear, written gift acceptance policy that outlines which in-kind gifts are acceptable, how they’ll be valued, and who approves them.
- Pinpoint potential donors. Look through your donor database to find potential in-kind donors. Reach out to donors who own businesses, work in fields relevant to the services you’re looking for, or are long-term supporters of your mission and may be interested in this additional giving opportunity. Additionally, you may contact local businesses within the community to see if they’re willing to lend their support.
- Promote wisely and selectively. YPTC’s in-kind donation guide recommends creating a wish list of needed items or services to “maximize the chances of receiving useful items that align with your gift acceptance policy and your donors’ budgets.” Keep this list focused and time-bound. For naming opportunities tied to in-kind gifts (e.g., donating theater seats or a playground), communicate both the tangible and recognition value to the donor.
- Acknowledge and steward appropriately. Always tailor recognition to donors’ preferences. Some may value a public spotlight, while others prefer a private thank-you. In every case, include required tax documentation, such as your nonprofit’s name and employer identification number (EIN), the date you received the donation, a description of the property received, and a statement indicating that you did not provide any goods or services in return.
- Showcase impact. Along the way, update donors about your campaign’s progress and how their in-kind gifts have contributed. For example, a homeless shelter building a new facility may spotlight one of their beneficiaries’ stories to show the positive outcomes this person experienced due to donors’ generosity. At the end of your campaign, create an impact report summarizing your project’s entire process and including a section about in-kind donors.
In-kind gifts can be a helpful supplement to your capital campaign—but only when used in service of a broader, strategic vision. Successful campaigns are built on strong fundraising programs and deep relationships cultivated over time. In-kind support may offset costs or provide meaningful opportunities for engagement, but it can’t replace the intentional donor strategies that drive transformational giving.
As always, consult your campaign counsel before integrating in-kind giving into your strategy, and ensure it supports, rather than distracts from, your path to success.
Editorial Note: This article is a partner-contributed piece and does not necessarily reflect the views or strategic recommendations of the Winkler Group. We believe in engaging with a wide range of sector voices and encourage readers to consider this content as one of many perspectives in the philanthropic landscape.
