Planning for Sustainability: Soliciting Contributions and In-kind Support
Learn about different types of contributions and in-kind support, identify potential sources, and how to obtain these supports.
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WHAT DO WE MEAN BY CONTRIBUTIONS AND IN-KIND SUPPORT?
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WHY SHOULD YOU SOLICIT CONTRIBUTIONS AND IN-KIND SUPPORT?
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WHEN SHOULD YOU SOLICIT CONTRIBUTIONS AND IN-KIND SUPPORT?
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HOW CAN YOU SOLICIT CONTRIBUTIONS AND IN-KIND SUPPORT?
Obtaining support through successful grants and submitted proposals is important to the financial sustainability of many community organizations. However, we all know competition for grants can be tough. You may consider what types of other resources may be available within the community. This section will give you some guidelines on different types of contributions and in-kind support. Additionally, it will help identify their potential sources, and provide guidance for how to obtain these supports.
WHAT DO WE MEAN BY CONTRIBUTIONS AND IN-KIND SUPPORT?
Contributions are donations of money from individuals, businesses, and other organizations in the community. Much of the funding for many non-profits comes from public funds – i.e., from taxes – and is distributed by some level of government. Public funds are limited, however, and most organizations must look for other sources of funding. Private foundations and United Way campaigns are often a second source of funds, but many smaller organizations (and some larger ones as well) aren’t eligible for these monies. Contributions may help meet the funding needed in order to run their day-to-day operations.
TYPES OF CONTRIBUTIONS
The idea of contributions sounds simple – it’s money that people, businesses, or groups give your organization. That’s essentially right, but there are a lot of variations. Some contributions are tax-deductible (that means you can subtract the amount of the contribution from the amount of money you pay taxes on, at least in the U.S.) and some are not, depending on the tax status of the receiving organization, what it uses the money for, and whether or not donors get anything in return.
Some organizations encourage donors to make larger donations by allowing them to spread the donations out over a period of time – often a year, but sometimes a longer or shorter period. Contributors may specifically give money to an organization’s endowment, or to a particular fund or a particular activity. They might encourage others to give in memory of a loved one who has died, or in honor of an important occasion – a wedding, an anniversary, a milestone birthday, a retirement.
Organizations may ask for small contributions differently than large ones, and may find creative ways to solicit funds. Major donors, those who give large amounts of money, may be treated differently, for instance, and offered some special recognition for their generosity. Contributors may be offered something – membership, recognition, a monthly organizational newsletter, a small gift donated by a business supporter (coffee mugs are perhaps the most common of these) – in return for their contribution.
Some contributions are paired with a purchase. Tickets to a special performance might cost $50.00 each, $25.00 of which is the ticket cost, and the other $25.00 of which is a contribution to the sponsoring organization. (In that case, the donor can only take a tax deduction for $25.00, the amount of the contribution.) Major donors may get preferred seats at these events, or have dinner with the performers.
Depending on the size and needs of your organization, you may want to think about whether to pursue major donors or not. Community contributions are typically in the $10.00 to $100.00 range, with a few of up to perhaps $500.00. Major donors to large organizations and institutions may give millions, although a major donor for most community-based organizations would probably contribute a few thousand – say, $2,000.00 to $5,000.00. The questions for any small organization are that of how much time and effort it takes to get a donation of that size, and whether it has the resources to invest in what may or may not be a successful effort.
Major donors generally have to be courted. Universities offer them the opportunity to name buildings or whole departments, wine and dine them at the best restaurants, and make them Overseers or Trustees. You probably don’t have the capacity to do any of those things, but you can meet with them, introduce them to your organization and its work, conduct guided tours of facilities and programs, and offer conversation with participants and staff. You might also discuss financial arrangements that can provide the best tax advantages for the donor. (You’ll probably need a lawyer or accountant to help you with this.) If you have the time, energy, and connections for this, it may be worth it. If it will detract from the quality of the organization’s work – unless it holds a promise of a really major donation, one that could advance the organization to another level – it’s probably not worth it.
In-kind support is a way for your group to collect resources other than money. Instead of buying everything with cash, you can look for donations from community members. In-kind resources, or non-cash contributions, might be things you'd otherwise pay for, or they might be things that money just can't buy. When someone volunteers to give you a service, supplies, or free help, you're receiving in-kind support. You can look for in-kind support both from within your organization's members, and from your local community.
Community organizations need resources to put their plans into action. One of these resources is, of course, cash money. But that money may not always be available, and some donors – people, groups, or businesses – may feel more comfortable donating something other than cash. In-kind support should not be seen as a second best to direct monetary donations, but as an equally important part of the resource pool available to your group.
Most likely, your group already receives a lot of in-kind support. Does another organization do your mailings for you? Do you share space with a Chamber of Commerce or other group? Can you use their photocopier? These are all examples of in-kind support, examples that you may or may not be counting as donations to your group.
So seeking in-kind support should be an integral part of your plan for action and sustainability. If your group is going to succeed, you'll want more than just money: you'll want goods, people, and services, too.
TYPES OF IN-KIND SUPPORT
Let's take a look at the three basic types of in-kind donations: goods, services, and people.
Goods are just about anything that isn't money - for example, a car, paper, equipment, or furniture. Goods are a vital non-cash resource for any organization. You can find goods everywhere: in homes, businesses, governments, and civic groups. They can be used or surplus, or they can be new products and merchandise. They can also be loaned, or they can be purchased cooperatively with another group.
Goods are a money substitute. Cash and in-kind resources such as goods make up a total resource package.
Some examples:
- Equipment and furniture, including computers and photocopiers.
- Supplies, including paper, filing folders, and other necessary office supplies.
- Space, including maintenance and utilities.
- Food that people bring to your regular meetings
Services are often grouped with goods as in-kind gifts. Many overlook services because, with few exceptions, services are not tax deductible as a charitable contribution. Some companies deduct the time used in performing a charitable service as a normal business expense. Others consider community service a business function and keep no record of its performance. Yet, services are a major source of support to successful nonprofit groups.
Corporations are the best-known contributors, but the giving of services is undoubtedly a community-wide practice. Small businesses, vendors, colleges, other nonprofits, individual professionals, and tradespeople all have services to offer. Everyone providing services for a fee is probably also providing it free, or at a discount, to some worthy cause.
Examples of services include:
- Printing
- Website hosting
- Transportation
People are the key to all resources in most service-oriented nonprofit groups. People resources are persons giving their time free of charge, for a small fee, or for payment by a third party on a nonprofit's behalf. Anyone who offers your group technical assistance or consultation, or who provides financial services and bookkeeping, or who volunteers to be a member of your board, is making an in-kind donation to your group.
People resources are not only volunteers. People do volunteer their services, but employers may "loan" their paid employees to work on community efforts.
Because people are everywhere, know everyone and do everything, their resource potential is unlimited. The challenge is to discover how to use the most people, in the best combination, to your organization's greatest advantage. Some possible ways – besides volunteering to help provide services, as they may in an educational or recreational organization, for example – that people can help your operation:
- Clerical help.
- Child care for special events.
- Fundraising.
- Legal, accounting, or other professional services
Examples of in-kind support:
- Having your local high school or town government – if they have a printing department – print your group's invitations to a community-wide meeting.
- Housing your group meetings in a building of the local state college. Having access to the college's photocopiers, and receiving help from them in doing your mailings.
- Having coalition members bring snacks and drinks to a meeting.
- Asking store owners to donate items for use in a fundraising raffle.
- Inviting skilled volunteers, such as carpenters, painters, or a local handyman, to fix up donated street-level office space that your coalition will use.
- Receiving old office furniture from a law firm that’s redecorating its own offices.
WHY SHOULD YOU SOLICIT CONTRIBUTIONS AND IN-KIND SUPPORT?
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