In-kind donation
An in-kind donation is a gift of goods or services — medicine, food, airtime, pro-bono work — rather than cash, recorded at an estimated fair value on the Form 990.
In-kind gifts are real help, but their valuation is elastic: a charity that receives donated pharmaceuticals can book enormous revenue and program spending without cash ever moving. That can flatter efficiency ratios.
When a profile shows very high revenue but modest salaries and cash flows, check whether gifts in kind dominate — and judge the organization by what it does with its cash.
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Related terms
- Program expense ratio — The program expense ratio is the share of a nonprofit's total spending that goes to its programs and services rather than to management or fundraising.
- Functional expenses — Functional expenses are a nonprofit's costs grouped by purpose — program services, management and general, and fundraising — as reported in Form 990 Part IX.
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