How to Grow Your Mission with In-Kind Gifts

by | Dec 8, 2021

Could your organization benefit from getting more in-kind donations of goods or services?

If you’re like most service-based nonprofits, you probably already have some level of in-kind gifts. 

But what if you could get the gifts you NEED (rather than what your donors think you want)?

What if you could track your in-kind donors easily, to build relationships and get ongoing donations that let you save your cash for where you really need it.

And what if you could do all of this WITHOUT reducing your cash donations?

Would that be a game-changer for your nonprofit’s finances?

This week on A Modern Nonprofit Podcast, Tosha is joined by Allie Meador to talk about how you can leverage technology to get much more out of in-kind donations.

Allie is the VP of Strategic Partnerships at RightGift, a platform that’s making it much easier for nonprofits to get more in-kind donations while simplifying the gift accounting process.

  • What is an in-kind gift or donation? (0:41)
  • A practical example of how in-kind can work (2:27)
  • The role technology can play in getting more in-kind donations (8:07)
  • Do cash donations decrease when you get more in-kind gifts? (9:30)
  • Why more nonprofits don’t focus on in-kind gifts (12:15)
  • How the pandemic has changed in-kind giving forever (16:50)

 

Thanks for watching. Be sure to subscribe for new episodes every week!

For more nonprofit accounting resources check out http://www.thecharitycfo.com

To try RightGift for free, visit https://rightgift.com/

Or reach out to Allie at allie@rightgift.com

🎥 Click the video below to watch the episode on YouTube.

🎧 Click here to listen to the Podcast on  AnchorFM or Apple Podcasts

👇 Or scroll below the video to read the full transcript of our conversation

 

 


A Modern Nonprofit Podcast

How to Grow Your Mission with In-Kind Gifts

12/8/2021

Tosha Anderson:

Do this. Hey, everyone. Welcome back to another episode of A Modern Nonprofit podcast. I’m Tosha Anderson, I’m going to be your host today. And I brought my friend Allie along with me to talk about something that I think is very modern, very interesting, very unique. So any of you organizations that get in-kind gifts or want to start getting in-kind gifts, this is a great episode to listen to. So Allie, thank you so much for joining us.

Allie Meador:

Absolutely, glad to be here.

Tosha Anderson:

So Allie, you are the VP of strategic partnerships for for a platform called RightGift. Allie, tell us first and foremost what this is, briefly, and then we’re going to start talking a little bit more about in-kind as a whole and how organizations can really kind of beef up their online or their in-kind campaigns.

Allie Meador:

Yeah, absolutely. So in-kind is very simple. Basically, in-kind contributions or donations of goods, services, or time anything that’s not cash. They can be as boring as asking for office supplies, like printer cartridges and whatnot, and as exciting as menstrual hygiene products. They’re completely tax deductible, just like a cash donation. But what it’s doing is it’s freeing up that cash so that you can use it somewhere else. So you can track the donations the exact same, based on the value of that item, just like you would cash gift. And RightGift is really a platform for bulk procurement for nonprofits and businesses with CSR minded goals and a wishlist platform.

Tosha Anderson:

Hmm. I love that, because there’s so many different areas where I know that my nonprofits go for in-kind, whether it’s online or even on their own websites or through like Amazon wishlist and things like that. So we’re going to talk a little bit more about that later on. But I think first and foremost, this in-kind word, I think is certainly a very unique term within the nonprofit space. And I’ve actually seen this word used in completely different context.

Tosha Anderson:

So I think first and foremost, Allie, let’s just kind of define what in-kind gift is. And I’ll let you describe it in a way that that talks about the conversation today. But this is not a, another way that in-kind is also described sometimes within grants and the federal government describes in-kind as like what portion of cash is the organization contributing to this cause. That’s not what we’re talking about. We’re talking about donated things. So Allie, what kind in-kind gifts are we talking about here? Just so that users or listeners that are kind of new to this donated goods or services space has an understanding of what this means within this context.

Allie Meador:

Yeah. So there, like I said, there’s such a wide range of physical items, but you can have services as in-kind as well. Time. So I have clients all over the country who literally will ask for in-kind items for a backpack drive, they’ll use their cash funds or their grant to buy the school supplies themselves. And then they will use a trucking company, a local electric company that has some of their vans up for the day and they will donate their time to go drop those items off at the school. So really you can utilize in-kind from the very beginning of asking for what you need to delivering that without having to use any cash.

Tosha Anderson:

Yeah. And I think something else to add to that, what I don’t think a lot of people realize, that in-kind goods specifically, are required to be reported on your tax returns. The IRS says you should value gifts. Now we can go down an entire rabbit hole of But, Tosha, donors given me a bunch of junk, I end up throwing it away. I know that that happens. So this is even more of a good a conversation to have, getting in-kind things that you actually want. But this platform, I think, is going to be really helpful for people to understand, okay, I need to be tracking these things. It needs to be in an organized way. And I see so many organizations that are extremely heavy on in-kind. What are these organizations? These are food pantries, for example. I worked with food pantries that the value of the things donated, which is their entire operations, essentially is all donated. And the value of this was not recorded anywhere on the books, right? I’m talking also about secondhand stores with clothing that is donated and then turned around and sold. The value of that is never.

Tosha Anderson:

And I’m not just talking about the money, like, the things that come in and the things that go out, but there’s usually a very large inventory that does have a value because it will be given away or sold at some point in the future. And I think that most organizations don’t realize that they are required are to keep track of these things. And they’re required to assess some sort of dollar value to those to be in line with what the IRS requires. And also the technical term is generally accepted accounting principles. I call them the accounting gods. You would think they would be on the same page. They’re not. The IRS has a certain set of rules and the accounting gods have a certain set of rules, but all of those rules would say, at least goods specifically, you need to be capturing a value for these goods.

Allie Meador:

Yeah. 100%.

Tosha Anderson:

And then services are also important too, for sure. Let’s not overlook those, like you had mentioned, Allie.

Allie Meador:

Yeah. And going back to being able to value that, that’s such a difficult thing. When you have a drop box in your lobby and people are just dropping off pencils, you have no idea how much that is. In the reseller world of Amazon, a lot of people are paying four to 600%. I mean, retail markups are a hundred, 200% just at Walmart or target. So you really don’t know the value of that item unless you specifically ask for it. And you define that value before you even start, which we like to help people do that at RightGift, because we’re giving them that menu of items, how much that case of pencils costs, so that it’s easy for them to print off that report at the end of the year and put it into their taxes.

Tosha Anderson:

Yeah, it’s funny because I think that’s the biggest hurdle for people to start putting structure around this in-kind system. And I, like I said, I’ve seen this several times now where I get organizations that most of their operations is dependent on a huge amount of donated goods and they have no system to even start. Like Tosha, where do I start? That’s usually the question. And it can be a little bit complicated. I mean, in theory it sounds simple, maybe, but it’s certainly overwhelming if nothing else. And for those of you that don’t have any system and you are getting in-kind goods, usually what an auditor or some sort of like charity watchdog would expect that you have some sort of consistent methodology for how you determine the value of these good.

Tosha Anderson:

Allie, so like you were saying, if you, oftentimes, if you have a afterschool program and you oftentimes get donated school supplies, maybe you don’t want to try to track down, well a generic pencil is worth this much and a name brand pencil is worth this much. And you know, but these pencils were on sale. You know, those sort of things. Usually we develop some sort of system like a box of pencils is worth $2 or something, I’m making something up, right. And you usually have a whole methodology for this. And this is also especially important for things like my food pantry clients, right? So every can of vegetables, we’re going to assess 50 cents. We’re going to assume it’s a discounted price. For every prepared meal, boxed meal, we’re going to assess it at this particular price. And RightGift helps simplify this for many organizations by creating some sort of standardization and not requiring us to keep reinventing the wheel every time we decide we want to launch some sort of more structured inventory tracking system.

Tosha Anderson:

I already know Allie, where I tend to start talking about these things, I know it’s almost immediately overwhelming.

Tosha Anderson:

The good news is, yes, there’s some like complexities and, and there’s some accounting rules behind it, but that’s the bad news. The good news is there’s a lot of tools that can help us do this. So Allie, aside from of just the initial anxiety and being overwhelmed, what are some of the other benefits of in-kind and in-kind procurement using technology? You know, the audience that’s listening to here, we’re always interested in what is a better solution, what is a new modern solution? So what are some of those benefits to using like an online platform to remedy this whole tracking system?

Allie Meador:

Well, first and foremost, we know that nonprofits don’t have a big budget to pay for technology. There’s not a lot of technology companies that are fighting to get into that market either. So we are kind of in a unique space between tech and the giving world. So what we’re able, with our supplier conversations, to negotiate a free platform for people just to try, right? So people can get over that hump of change and being a little bit more flexible with how you ask for stuff, you’re going to save your cash so that you can make payroll and give those nonprofit employees that have been wearing all of the hats, a little bit of a raise. You can use that money to fund educational programs so that you can further your mission in the community, instead of spending that money on diapers, boxes of diapers, for example.

Allie Meador:

You’re going to save time. Like I said, there’s a lot of people, I have clients that will literally go to every Walmart in the city to get the size socks that they need. And they could have spent that whole week procuring those items, giving them to people, and we could have done it for them. So it’s really saving time so that you can further your mission, but also you get new donors. A lot of people are scared that cash funds are going to deplete, essentially, when they start asking for in-kind. But that’s not the case. There’s no data that suggests that anywhere. And really what you’re doing is a lot of people don’t trust cash giving, especially now when everyone is really needing and asking for that, those fundraising ideas and whatnot. So really it’s opening up a new avenue of giving for your organization so that you can keep growing and you’re going to be able to retain your donors, right?

Allie Meador:

If you’re using an Amazon and wishlist right now, you don’t get any donor information. So you can’t say thank you. You can’t make them feel like they made an impact. You can’t even follow up with a statement that says, this is what your money went to. Right? So with RightGift, we’re collecting that donor information. And you’re able to thank them after, which is the number one reason why donors don’t return is because they weren’t just given a simple, thank you. So those are just some of the benefits of using in-kind. And like I said, there’s really no risk when it’s a free technology.

Tosha Anderson:

Yeah. And one of the things that I’ve also noticed, too, because I work with a lot of organizations in early childhood education and one of the big things that they really need and that they try to run campaigns on, and some of them have just started asking even, are just diapers and diaper wipes, right, that’s a very big commodity out there. They’re very expensive. A lot of the parents and families can’t afford to bring them into the school. So the school will cover the cost of them. And they’re a huge line item within their budget. And I think that there is something to be said about when donors can tie something like even a diaper, knowing that a child at that school is able to use that diaper. They just have a connection with the organization.

Tosha Anderson:

And I find that by being able to promote, we’re having a diaper drive, and this is the easiest way you can help support that cause, by having a platform for which people can easily just go in and purchase these or go in and contribute money to that cause, makes it so much easier for organizations to, first of all, even ask, right? And then as you mentioned, through a platform like this, they could start collecting donor information and those sorts of things.

Tosha Anderson:

So I think all around organizations, don’t always have a really robust wishlist and in a wishlist that they’re getting the things that they want. It’s not really always maintained very well. And it sometimes just not really communicated. And now with social media and websites, it’s so easy to make those asks even in online newsletters, email campaigns, those sort of things.

Allie Meador:

Yeah, absolutely.

Tosha Anderson:

We can actually see that. So obviously this platform is out there obviously in-kind is an ongoing conversation. At least for me, that I have with my clients and even prospective clients all the time. Why do you think then, Allie, more nonprofits are not going down this route with collecting in-kind?

Allie Meador:

Yeah. I think it goes back to that fear of losing cash. Right? Which, don’t be afraid of that because it’s not real. We work with thousands of clients all over the country and that has never been one concern of theirs after using the platform. Also Amazon downfalls, right? So you might have had a bad experience with another wishlist platform, and so you don’t want to try another one. I mean, Amazon is essentially just a reseller market, right? Like I said, people are marking up items for 600% and you’re paying a pretty hefty price for an item that you would rather just buy locally because you think you’re going to get a better deal there, which is normally true. Right? But also it’s not being flexible or just open to new technology.

Allie Meador:

And in fact, I like, have my clients do this sometimes. I’ll have them go on Amazon, find an item that they like any item, even a personal item, and then go put that same item, the name of it or the UPC code in Google and see how much that you’re actually paying for it. Because when you can save that money, then you can buy more product, help more people.

Tosha Anderson:

Sure. And I think one of the things too, that I suspect is a little bit of a hurdle for nonprofits. You know, we do accounting for nonprofits, but I always joke that we’re actually an IT company that happens to do accounting for nonprofits. And I feel like, because everything’s so technology driven and one of the concerns or issues that I’ve seen, even when I used to be a CFO of a nonprofit, there’s all these platforms out there, there’s all this technology. And I think most people generally believe that yes, it would save me time in the long run or that would be a really great solution. But I think that one of the challenges is that there’s no one to do the implementation for something like this. So who within your clients that you work with, Allie, is usually managing this database? I’m assuming that someone on the fundraising team, is that accurate? Or who would be the ones that kind of do the integration for something like this?

Allie Meador:

So in the beginning, RightGift started as a wishlist platform only. And then we saw the need for both procurement. We were getting the wholesale pricing. So we grew into that. So in the beginning you were seeing a lot of development directors, liaisons within that department. Sometimes it was someone who was just running an event, right? They were doing a toy campaign and that’s really where we started. And then once they started to see the benefits of the platform, we started to move into the procurement director area. And a lot of groups have, a lot of nonprofits, especially business with CSR programs, they have a certain amount of money they have to spend by a certain time, right? So they are actually, they’re set up for this. It’s basically like filling in an RFP. So there are people who are very experienced in this field. And then there’s people who just run the toy drive every single December. And we work with them in any capacity that they need, really.

Allie Meador:

So I think the, the basis of good technology is that there’s, there’s somebody there that you can talk to that can answer your questions. And that’s what we really focus on is low pricing in a consultancy service without a fee.

Tosha Anderson:

Well, what this kind of reminds me too, is many organizations I think are seeing the benefits of special event software. So registration software ticket, sales software, more and more nonprofits on the fundraising side are understanding that there’s these different platforms that really create a better user experience on the donor side or whoever’s purchasing tickets, or whatever it might be. But it’s also helping us stay a little bit more organized so we can run basic reports and say, okay, how many tickets do we sell? How do we do this? Rather than keeping track of it in an old school way, maybe on Excel spreadsheets or things. And I have noticed more and more different types of platforms that’s coming into play with respect to nonprofits. And I think this is just one example that I know so many of our clients spend so much time receiving, tracking, collecting, thanking donors for in-kind it’s a full time job for some of our organizations, certainly.

Tosha Anderson:

So I think this is an area where much like special events nowadays with auctions and online auctions, and that’s become more and more relevant over this past two years now with the pandemic. So something to think about for sure. Speaking of the pandemic, though, how do you think in-kind has changed in your experience because of the pandemic?

Allie Meador:

Yeah. In-kind has changed forever. It will never be the same. Now people know where their products are coming from. They were getting stuck on boats as they were coming overseas. We had cases and cartons of Teddy bears that were stuck off the coast of California that just couldn’t come in because of the pandemic. So you saw a lot of supply chain disruptions, which affected pricing, which affected if you could even get the product to begin with. So we saw caps on how much you could buy, especially on Amazon and some of those retail sites, you couldn’t get five things of Lysol wipes. And for a homeless shelter, they have to have that because a lot of these places closed down. So the restaurants and the places where the homeless would go wash their hands in general, those aren’t open either.

Allie Meador:

So we saw longer shipping times and we’re going to continue see that six to eight weeks. Lost packages, packages not being tracked. So everything kind of fell apart from where we were getting the items from in the United States to if the items were even being delivered to the right person at the right time.

Allie Meador:

So I would say that that’s the biggest thing was the supply chain disruption. And also kind of why we got into bulk purchasing. Buying these items in advance at the wholesale price before they got too out of control, so that the nonprofits and businesses could even afford them to begin with. I mean, diapers are a nightmare to try to get right now. And that’s something that I know our team is really focusing hard on, on a couple of pillars that we know are going to be essentials, disposable items for the next 12 months as we make it through this. Because it’s going to keep going through 2022 spring, summer until we see things start to kind of pan out a little bit. I think CNN and called it the perfect storm. So basically everything you need, that you would need, a nonprofit person would need, someone they were helping, basic stuff is just going to be expensive slash not available.

Tosha Anderson:

Yeah. It’s interesting. I have a client, it’s a food pantry that works down in Florida Keys. And so she had shared with me that in the past, when they have a hurricane or some other natural disaster that they’re helping their community, there’s the rest of the state that can help rally and support them. But when it’s the entire state or the entire region or the entire country, there’s no one else to pull in resources from that they are used to being able to do that. But now they’re in a situation where they can’t do that anymore. It’s kind of every organization for themselves, if you will, unfortunately.

Tosha Anderson:

So Allie, I think this has been really helpful for organizations to start thinking about, okay, do I get in-kind services or good, I know we talked a lot about goods, but services also important to keep track of. Should I be doing more of this? Should I be finding a better way to ask, because people do want to support organizations. They do want to give things that they can feel good about giving. I see that all the time, it’s really quite humbling and overwhelming to see how much people want to give of goods. Especially if there was an organization out there that wanted to chat more with you about this particular platform or in-kind, what their processes are, and maybe how this platform can make it a little bit easier for them, Allie, what would be the best way for somebody to get in touch with you?

Allie Meador:

Yeah. So I would honestly say, start at rightgift.com. We have a discover page and we have tiles of businesses we work with, nonprofits, we work with, national and local. So no nonprofit or business is too big or too small. And really it’s just emailing me at Allie, A L L I E, @rightgift.com R I G H T G I F T. And from there, we basically just set up a little demo. I walk you through the platform. We talk about what your giving goals are, and it’s pretty simple.

Tosha Anderson:

Love that. We love simple. We love simple and we love inexpensive. Like you said, this is at no cost, right, to the nonprofits

Allie Meador:

Yeah, no cost to individuals, nonprofits or businesses. And then essentially anything you buy through the platform or your donors buy for you through the platform is 1% cash back.

Tosha Anderson:

Fantastic. So it’s kind of a no lose scenario here. So Allie, thank you so much again for joining us. And for those of you that are still struggling with your in-kind, definitely I reach out to Allie. It sounds like she has a really great platform. It should at least be worth considering to see if there’s a way that you can get this under control. I so often see so many nonprofits that come to us after the fact when they realize, oh, I need an audit now. Oh, I have all of these in-kind. I have no process to track them. And now this is going to be a huge problem whenever I go to get an audit complete or tax return complete. So please, and don’t wait until it’s too late. Be proactive about it and put some good systems in place. Until next time, everybody. Thanks.

 

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