Charitable donations come in many forms. While it is tempting for nonprofits to focus on larger grants, it is also important to cultivate a pool of in-kind donors who contribute gifts on a regular basis. Some companies prefer to donate goods rather than services and this is a great way to begin long term partnerships with businesses who may grow into becoming major sponsors.
These donations are often used as raffle prizes or silent auction items for annual fundraisers, but can also be utilized to meet regular supply needs. In-kind donations can be tangible items such as office supplies, computers or cars. They can also be services like tax preparation, cleaning or consulting. In-kind donations can alleviate operational costs throughout the year. They can also make an expensive event more cost-effective with donated event space, food, and entertainment.
Companies and individuals can make in-kind donations and these are tax deductible, similar to monetary gifts. These donations should be tracked and reported. Your organization’s donation committee can keep track of needs, requests, receipts, thanks and cultivation of repeat donors.
The following tips can help organizations get started with in-kind donations.
TIP 1: IDENTIFY POTENTIAL DONORS AND GET ORGANIZED
Nonprofit board members should have a network of people they have built relationships with over time. These relationships are often with friends, business owners, co-workers and community members. Inform your board of this expectation and regularly ask how they are engaging their networks about the mission of your work. Organize and do not duplicate. Hold a meeting focused on identifying potential businesses for in-kind donations. Avoid multiple team members reaching out to the same business. Discuss the type of event being held; who will be at your event, and deliberately target businesses that will mostly likely donate. Decide and document who will reach out and if they will do so in person, via an email, phone call, or online submission form. Confirm that your mission and values line up with the companies you are approaching for in-kind donations. Many larger companies have in-kind donation submission forms on their websites. Be aware of the proper protocol before asking for an in-kind donation.
TIP 2: TELL THE DONOR WHAT YOU CAN DO FOR THEM
Let’s say you’re planning an event celebrating your volunteers and need to feed 100 attendees. Ideally, you’d identify restaurants within a few blocks of your venue and prioritize the ones who would most benefit from the visibility your event will provide. Let’s say the top option is a new restaurant just across the street. Your first step should be going in and speaking with the owner or manager. After you introduce yourself and your cause, and likely share some compliments about how much you admire the restaurant and menu (never be afraid of appropriate flattery!), you’d make your pitch along the lines of:
“I know you are new to the neighborhood and are trying to build awareness. Our event will bring together over a hundred key influencers from this neighborhood and other parts of the city just across the street next month. If you contribute two large platters of appetizers, we’d gladly promote your restaurant by giving all our attendees your business cards and setting up table cards to recognize your generosity. In fact, if you can provide four platters and be the exclusive food provider for the event, we can add you to the sponsor page in our program and on our website. Do you have a coupon or something special we could include?”
Remember it’s not an ask if it doesn’t end in a question mark… and a pause. So smile, look positive, and don’t say another word. You’ve made your ask, now give your potential new partner time to respond. Let silence be your friend for a minute or two. Your confidence will make it easier for you to get the answer you need.
TIP 3: BE SPECIFIC
Ask for a Specific Amount. For example, it’s better to ask a hotel manager for a three night hotel stay than to just ask for a donation. You’ve done the hard part by coming up with an idea for the donation, and if you ask for what you really want, you may just get it. With this strategy, you have also left the door open for a counter offer. You may not be able to get a three night hotel stay, but you may get a one night stay instead. It is also important to explain what your organization does. A donor is more likely to make a donation when they understand the impact that your organization has and how they can support it. Being specific is also to your advantage. Saying “Your donation will help our animal shelter” is not as effective as “Your donation will help to pay for vaccinations for our puppies”. As in all “asks”, telling your story in a compelling way is one of the best ways to assure success.
TIP 4: MAKE YOUR GOODS PROVIDER YOUR IN KIND DONOR
Since a lot of the items you need for your race are provided by businesses who have an interest in engaging with your audience, in-kind sponsorship provides a much better platform for mutual value creation than cash sponsorship. Let’s assume that you plan to cover the purchase of T-shirts through sponsorship. You can either (a) seek a cash sponsor for $1,000 or (b) look for a sponsor willing to provide the items directly. And who better to do that than a T-shirt manufacturer. By asking a manufacturer of the goods you need to provide the items as part of an in-kind sponsorship, you are achieving two things at once: Getting the items you need at a much lower actual cost to the manufacturer. The manufacturer will likely not think much of providing the items at cost and would much prefer that over putting up the cash equivalent. Giving the sponsor a natural, guaranteed activation channel for his sponsorship. After all, if you ask Adidas to provide you T-shirts for your race, they will know their product will be going straight into the hands of their potential customers. Which is much better than any promise of a logo placement or race bag leaflet. So, when you can, go straight to the source: make your goods provider your in-kind sponsor.