What Is an In-Kind Donation? (And Why It Matters More Than Cash)

Most people think of charitable giving as writing a check or clicking a donate button. But there's a second category of giving that nonprofits often need more — and that donors find more satisfying.

It's called an in-kind donation. And in 2025, it's reshaping how Americans give.

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Definition: What Is an In-Kind Donation?

An in-kind donation is any non-cash contribution made to a nonprofit organization. This includes:

• Goods: Food, clothing, furniture, electronics, medical supplies, sports equipment
• Services: Legal advice, accounting, graphic design, photography
• Property: Real estate, vehicles, intellectual property

The key difference from a cash donation: the donor gives something tangible, not money.

In-kind donations account for roughly 20% of all nonprofit contributions in the US — yet they remain underutilized by most giving platforms.

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Why In-Kind Donations Matter

1. Nonprofits Get Exactly What They Need

Cash donations give nonprofits flexibility — but that flexibility comes at a cost. Organizations must purchase items themselves, adding procurement time, overhead costs, and supply chain complexity.

In-kind donations remove all of that. A food bank that receives 500 cans of soup doesn't have to buy them, store money, or wait for a committee meeting to allocate funds. The soup arrives. It gets distributed.

2. Donors See Their Impact Immediately

One of the biggest reasons donors stop giving is that they don't see what happened to their money. In-kind giving solves this by nature — you donated a backpack, and a child has a backpack.

Research shows that donors who give in-kind have a 60% higher retention rate than one-time cash donors. The tangibility creates connection.

3. Less Overhead, More Impact

Nonprofits spend an average of 20–30 cents of every cash dollar on administrative costs. In-kind donations — especially when delivered directly — bypass most of this overhead entirely.

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Types of In-Kind Donations Explained

Type	Examples	Tax-Deductible?
Goods	Food, clothing, equipment	Yes (fair market value)
Professional services	Legal, accounting, design	Generally no
Use of property	Office space, vehicles	Sometimes
Software/technology	Licenses, platforms	Yes

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Are In-Kind Donations Tax-Deductible?

Yes — with conditions.

For goods, you can deduct the fair market value of the item at the time of donation, provided:

• The recipient is a registered 501(c)(3) nonprofit
• You receive written acknowledgment for donations over $250
• You complete IRS Form 8283 for non-cash donations over $500

For services, the IRS does not allow a deduction for the value of your time — but you can deduct out-of-pocket expenses incurred while volunteering.

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How In-Kind Donations Work in Practice

Traditional process (slow):

1. Nonprofit posts a need on their website
2. Donor sees it, contacts the org
3. Nonprofit provides shipping address
4. Donor purchases and ships the item
5. Nonprofit manually confirms receipt
6. Donor never hears back

Modern process via Givelink:

1. Donor browses verified nonprofit catalog
2. Selects needed item from curated wishlist
3. Checks out — platform handles routing
4. Nonprofit receives item in 2–3 days
5. Donor receives photo confirmation + tax receipt

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In-Kind vs. Cash: Which Is Better?

Neither is universally better. Here's a simple framework:

Give in-kind when:

• The nonprofit has a specific, immediate need
• You want to see exactly where your donation goes
• You want a higher emotional connection to your giving
• You're donating goods you already own

Give cash when:

• The nonprofit needs operational flexibility
• You're supporting long-term programs, not immediate needs
• You're making a large strategic gift

For most frontline nonprofits — food banks, shelters, youth programs — in-kind is often more valuable than cash in the short term.

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The Future of In-Kind Giving

Platforms like Givelink are making in-kind donations as easy as online shopping. By combining:

• Verified nonprofit wishlists
• Amazon product routing
• AI-powered impact tracking (IRIS)
• Automatic tax documentation

...the friction of in-kind giving is disappearing. What used to require phone calls, address lookups, and manual receipts now takes 3 minutes online.

Make your first in-kind donation on Givelink →

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Frequently Asked Questions

What is an example of an in-kind donation? A company donating laptops to a school, an individual sending hygiene kits to a homeless shelter, or a lawyer providing free legal services to a nonprofit are all in-kind donations.

How do nonprofits record in-kind donations? Nonprofits record in-kind goods at fair market value on their financial statements, following GAAP and FASB guidelines.

Can businesses make in-kind donations? Yes. Corporate in-kind donations are common and often more impactful than cash — companies can donate surplus inventory, services, or technology at scale.

What is the difference between in-kind and cash donations? Cash donations give nonprofits money to spend as they choose. In-kind donations give specific goods or services directly, with no overhead deduction.