This is a continuation of a previous blog post “In-Kind Costs” about (you guessed) in-kind costs. In that blog, I suggested grant writers should avoid putting in-kind costs into a grant application.
As a definition, in-kind goods and services do not involve the exchange of money. An example of in-kind services are volunteers providing labor or professional advice. In-kind goods usually include the use of equipment.*
Although I would avoid in-kind costs in a grant application, sometimes a nonprofit is required to assess the value of in-kind goods and services given to them. This could be for accounting purposes to determine the contribution to the nonprofit. Or, a foundation could ask this in a grant application. So, how much value or cost to assign to in-kind goods or services?
This is why I suggest in-kind costs not be in a grant application. While some organizations, like accounting firms, provide guidelines, really there aren’t any. It’s all subjective (based on a person’s viewpoint).
The best thing for a nonprofit is to establish a cost model to assign values and not change it. Consistency is a good way to provide value to in-kind goods and services.
This blog came up because a foundation requested in-kind costs be included in a grant application.
Being subjective, in-kind costs can never be a strength and can easily become a weakness in an application. While a nonprofit can put a consistent value on in-kind, there is always a question if that was the correct value.
In the application, I will provide broad costs, but no details. I will follow these costs with the number of volunteer hours given, equipment used, or other non-cost data. I think these non-cost data are more important because it represents people wanting to give their support freely without payment.
- Note: Supplies are mostly considered donations because they are used up.