In-kind sponsorship
is an option for organizations and individuals who want to support a good cause but don't necessarily have a lot of extra cash to contribute. In-kind sponsorships allow people to help in whatever way they are most able, by sharing the strengths, skills and resources that they do have.
Definition
In-kind sponsorship is the donation of noncash goods or services to a cause, movement organization or issue. This type of donation is often made by businesses that have assets that would be useful to the recipient. This type of aid is more efficient than if the business were to donate money with which the recipient would purchase the same assets. Because a business produces or acquires its assets at less than retail, it can donate them at a lower effective cost than if they were to be bought and sold.
Advantages
When a business or individual makes an in-kind donation to a qualified cause, he can claim a tax deduction for the cash value of that donation. In addition to the financial benefit, the donor is often personally gratified by knowing that he has been helpful to something that he believes in. Businesses and public figures can also put the donation to good use by using it for publicity purposes. The greatest advantage is the continuance of worthwhile social groups and movements, many of which are entirely dependent on voluntary donations from supporters.
Disadvantages
If an in-kind donation is made to a group without proper planning, it's possible that it will be more difficult to put to good use than a cash donation. If the donation is bulky, difficult to transport or store, or subject to spoilage, it may become a burden for the recipient group. It's important for donors of in-kind donations to consult with recipient groups and decide when and where the donation would make the most sense.
Examples
In-kind donations could include publicity and promotion services donated by a television or radio station, newspaper or magazine. A trucking or taxi company may donate transportation services free or at cost. Building materials companies often make donations of lumber, roofing or other materials to charitable groups such as Habitat for Humanity or the Red Cross. Lawyers and law firms sometimes offer pro bono services to defend people in political causes. Any company that offers a product or service is likely to be able to find a situation where their donation would be appreciated.
