How to Write the Ultimate In-Kind Donation Letter
Nonprofits rely on monetary donations to thrive. However, they sometimes have an urgent need for a specific item, service, or form of expertise, especially when hosting events or seeking to support a beneficiary in some definitive way.
When your nonprofit’s obligations fall into the above category, an in-kind donation letter is one of the best ways to go about securing a solution.
In this article, we will cover:
- What Is an "In-Kind" Donation Letter?
- What Makes an Appealing In-Kind Donation Letter?
- How To Write In-Kind Donation Letters To Businesses
- What Should an In-Kind Donation Acknowledgement Letter Contain?
- Final Thoughts
No time to read this article now? Download it for later.
What is an "In-Kind" Donation Letter?
There are many kinds of donation letters, each geared toward their own audience, and each reflecting a specific need that often must be fulfilled by an explicit time. Examples include your standard donation request letter, end-of-year donation letter, and fundraising appeal letter.
An in-kind donation letter runs along the same lines. It is a type of correspondence between your organization and its supporters that either communicates a need for a good or service, usually before a holiday or event or thank a donor for what they have contributed to your in-kind campaign.
Typically, in-kind donation requests will be sent out when planning and preparing for an event, or when a new project has been outlined and the need for a good or service becomes apparent. In-kind donation acknowledgments, unsurprisingly, are sent out afterward, generally, once the donation has been received or the event it corresponds to is over.
Your nonprofit, for instance, may send out an in-kind donation request letter to ask for help with catering an upcoming event. You could market it as a great way for businesses to gain notoriety. A restaurant may then be inclined to provide food free of charge as a gesture of generosity and support.
David is ready to get started with in-kind donation letters!
Alternatively, your charitable organization may request professional expertise from lawyers who can help you follow any tax-related guidelines set forth by the IRS for 501c3 nonprofits.
Your response to any individual or business that steps up to the plate is just as important as obtaining the aid they have provided. Sending an acknowledgment letter, at the very least, is extremely critical to establishing long-term relationships with donors and improving brand image. It also serves the admirable purpose of simply expressing gratitude.
Now that we know the basics of in-kind donation letters, let’s dig into what makes a good one.
What Makes an Appealing In-Kind Donation Letter?
An appealing in-kind donation letter is one that emphasizes, above all else, your cause. Remember, people do not necessarily donate to your charitable organization just to support it in particular; they donate because they want to help the mission your organization represents.
As such, everything you write in your in-kind donation letter, as well as in your in-kind donation acknowledgments, should reflect the generosity your recipient can show or has shown your beneficiaries - the people, animals, or other subjects of your organization’s work.
A good in-kind donation letter contains the following sentiments in order of decreasing importance:
Authenticity of Sentiment
You should write your donation letters, of any kind, from the heart. Before you begin writing, take a second to consider the generosity of your potential donors. Requesting that someone part with a good or service that has some value is a big ask, so you should ensure that your recipients feel appreciated and that you understand the sacrifice they are making.
Concern For The Cause
This one will obviously come naturally, but it is important to make sure it is conveyed properly in the letter. The number one thing you have in common with your supporters is a concern for the cause at hand. Amplifying this sentiment is a very effective way to have your message resonate with them.
The Need for the Donation
In an in-kind donation letter, you get to be a little more clear-cut about why your organization needs the donation in question. This is because, typically, an in-kind donation is given for a definitive cause like an event or drive of some kind.
For example, a standard fundraising appeal letter asking for money may mention a specific project, cause, or purchase that the money will go towards. An in-kind donation letter, by contrast, can mention the need for 50 pairs of shoes which will be distributed in an underprivileged neighborhood, or the need for a variety of children’s toys to aid families going through financial hardship during the holidays. Just as these holiday appeal letter fundraising samples depict, mentioning the importance of the festivity at hand on the beneficiary’s well-being can increase the likelihood that potential donors will sympathize to the extent that they will feel compelled to donate.
The Authority (And Transparency) Your Organization Possesses Within Your Cause
Secondary to the above sentiments, but still fairly important, is the authority of your organization. This means you should convey a sense that while your cause is something everyone should contribute to, your organization has the knowledge and experience to make the most difference with the contributions they are requesting. Donating to the cause through your organization is the best way for the donor to aid this mission.
Be careful when applying this sentiment to your in-kind donation letter. You never want to be too explicit (or grandiose) about it. Do not say or imply anything negative about other organizations. The best way to convey this subtly is through the use of statistics. Mention how many animals or families were fed through your organization in the past month or year. Slide in a stat about the number of trees you planted or the amount of trash you picked up off the beach. This gives the potential donor a sense of your organizational efficiency without creating an unbecoming atmosphere of superiority or competitiveness.
In addition, transparency ensures that your potential donors know just where their donations are going, to whom they are going, when they will get there, and how. A description of the entirety of this process bestows your organization (and your in-kind donation letter) with an air of truthfulness, good intent, and professionalism. It shows your recipients that your organization not only knows how to get the job done, but that it will.
Now that we have reviewed a few guidelines on how to make your in-kind donation letter appealing, you are ready to start writing it. Let’s go over some specific steps on how to make it pop.
How To Write In-Kind Donation Letters to Businesses
You can write an in-kind donation letter to anyone (for example, to individuals who have made in-kind donations to your silent auction), but when you have received large quantities of a good or an expensive service, you will most likely be writing it to a business.
Here are the steps to take when writing an in-kind donation request letter to a business:
First Paragraph: Introduction and Why The Donation Is Needed
Your first paragraph for an in-kind donation letter to a business will be about the same as any other donation letter.
Start by introducing your cause. If the business has donated in the past, the first paragraph is the perfect place to mention that. Bring up some relevant stats about the cause that highlight the scale of the problem.
Matthew is starting to type up his letter right now!
Your first paragraph should be your hook: something that draws the reader in and compels them to retain your message. Images and other visuals should go directly under the first paragraph and should accompany any information it holds. These images serve as an emotional reminder that your cause reflects a real-life issue and that action is required.
For example, let's say you run a women's shelter in downtown Chicago and you are seeking volunteers to provide your beneficiaries free legal counsel. The first part of your in-kind donation letter could look something like this:
The Downtown Women's Shelter of Chicago needs your help! Over 70% of women in our community are seeking refuge from domestic violence and need legal counsel. In the past, your company has graciously provided a few members of your organization to aid these women in extracting themselves from difficult living situations…"
Below this text, you could place a photo of a few beneficiaries at your shelter posing with volunteers from the hypothetical firm.
Second Paragraph: Specific Donation Request and Reason
The second paragraph of your in-kind donation letter is where you get down to the nitty-gritty. It is where you mention your specific donation request and the reason why that distinct service or product, as well as the quantity of it, is needed.
This serves two purposes:
- It reduces the action threshold.
When a decision-maker reads any kind of pitch, their brain is already imagining what the next steps would be if they agreed to the appeal. There is a certain level of required action below which they are far more likely to accept your request.
Mentioning what you distinctly need, including how much of it, reduces the amount of required action on the reader's part. For example, if you require the means to make the animals in your shelter more at home, request blankets for the exact number of dogs and cats that currently reside there. Ensure, essentially, that your recipients are aware of the scope of your needs; make it quickly apparent to them that they either have the ability to donate or they do not. Lowering this action threshold makes it more likely that your donation request will be accepted from a variety of people.
Pro Tip: It is also a good idea at this stage to mention how your organization will accept the donation. If you have the ability, offer to pick it up from the business. Otherwise, you can list where they should ship it and even provide a pre-filled shipping label if possible.
It highlights organizational effectiveness.
As the saying goes, time is money for a business. Showing that you have already outlined your needs and done the legwork in planning an event or project shows the business that you value their time.
It also shows that your team has the know-how to execute an idea, which is something that many people appreciate seeing in a nonprofit they are considering donating to.
In keeping with the women’s shelter example provided above, your second paragraph could look like this:
"If a few members of your firm were able to visit, at whatever time is convenient to you, we would notify the women in our shelter. We would have our rec room set up to accommodate visiting members of your team so that they can provide one-on-one consultations with ease. We will also provide…"
Third Paragraph: Reciprocation
The third paragraph of your in-kind donation letter is where you show the business in question how much contributing to your charitable organization can benefit them. It is where you show them that your organization is not a taker, but a giver. You, of course, already know that, but it is a good idea to convey it to donors when you have the chance.
There are two forms of reciprocation you can give to a business that can increase your odds of an accepted request: Tangible and sentimental.
Tangible reciprocation is a form of "returning the favor" that offers a real-life contribution to the business. Usually, this takes the place of promotion. Offer to showcase the business’s generosity on your social media pages, or put their logo on a T-shirt. Animal shelters may choose to make one of their long-standing residents the "face" of their organization - the sponsoring business’ logo right next to it will certainly catch the eye. Businesses thrive on brand exposure, so giving them some in return for their generosity is very enticing to managers and decision-makers.
Sentimental reciprocation is much simpler: say thank you. Showing true gratitude not only constitutes good manners, it can also open a door to future collaborations between the business and your organization. These lapsed donor letter examples can help you address any former recurring donors that have recently stopped.
The third paragraph of our women’s shelter example might look like this:
"In exchange for your time and expertise, we would be happy to put your company’s name and logo on our banner which is displayed at every single one of our events. Your company would be invited to attend each one, and would be recognized in our annual report as a key donor alongside a full brief and description of just how much you have helped us change the lives of the women who come to our shelter for help…"
And now we are ready to move on to the details regarding how to format a donor acknowledgment letter!
What Should an In-Kind Donation Acknowledgement Letter Contain?
After you have sent your initial in-kind donation request and received a donation as a result, it is time to show genuine, authentic gratitude. An acknowledgment letter, or a thank-you letter for donations, is the perfect way to do that.
But an in-kind donation acknowledgment letter is also where you can accomplish a number of other goals. Let’s go over these best practices.
Body Text: Gratitude and Recap
The first paragraph of your in-kind donation acknowledgment letter is where you should mention how much your donor's gift will benefit your cause and your organization. You should recite the good or service that was gifted and in what quantity to refresh the reader’s mind.
Your second paragraph is where you can delineate the success of the donation. Highlight the event or project that the donation went towards and how much it helped the cause. Show pictures of their product or service being used or given to your beneficiaries.
These may seem like an afterthought, but it is actually very important to include all of the following information in your in-kind donation acknowledgment letter:
Your organization’s name and logo
A statement on your tax-exempt status
The donor’s full name/company name
The date and fair market value (FMV) of the donation
A donation receipt for the donor in accordance with 501(c)3 donation rules
Adding this information ensures that you are in compliance with your tax status, but it also gives the donor a hard-copy record of the donation for tax season (which just so happens to be plastered with your slogans and logos!).
Anthony is feeling strong about his first letter!
Postscript (or P.S.): Establish the Relationship
The postscript at the end of your acknowledgment letter, interestingly enough, will actually be the first thing 79% of your donors will read. Since it is separate from the rest of the letter, it naturally draws attention. Your donor will start your letter, skip to the P.S., read the rest of the letter and then read the P.S. again.
This makes it the perfect spot to suggest an ongoing relationship with the donor, opening the door for future partnerships. It seems like an afterthought, so you come off as more grateful than greedy, but it still gets read and retained more than you would think.
Here is a simple example of how to initiate a conversation (or the possibility of a conversation) for future donation:
"P.S. Donations like yours allow our organization to continue to fight/help/support [YOUR CAUSE]. There is always a need for donations, so if you find yourself in a position to make another in-kind contribution, please do not hesitate to call us at [PHONE NUMBER] or email us at [EMAIL ADDRESS]"
It is as simple as that! Adding that blurb to each acknowledgment letter you send just makes it that much more likely that a recurring donor might come into the fold.
In-kind donations can be massively helpful when you have a specific need for a product or service. To secure in-kind donations, your request letter should convey authenticity, concern, need, and authority.
While writing your letter, you should focus on explaining your cause and mission, and highlight your need for whatever in-kind donation you seek. Make sure to lower the reader’s action threshold by making it as easy as possible for them to make the donation. You can do this by outlining exactly what you need and how they can give it to you.
Offer to showcase your donor business’ generosity to show that you know they are making a sacrifice and are willing to reciprocate in good faith.
Finally, once you secure a donation, be sure to send the business or sure donor their donation receipt along with a heartfelt thank you and a quick section about how their specific in-kind donation has helped.
If you follow all of these steps when writing an in-kind donation letter, you will find that people and businesses are much more likely to respond to the letter, make a donation, and continue to work with your organization in the future.
Enjoyed the article? Download it to keep or share with others!
💡 What are the different types of in-kind donation letters?
There are two basic types of in-kind donation letters. First, there is the in-kind donation request sent to a potential donor. Then, there is the in-kind donation acknowledgment letter sent after your organization receives a donation. Find out more.
🔑 What makes a good in-kind donation letter?
A good in-kind donation letter is authentic, shows concern, and provides a context for the need for the donation. It also shows that your organization is an authority in the space. Find out more.
📝 How to write an in-kind donation acknowledgment letter?
Start by highlighting your cause, using statistics and imagery to hook the reader. Then, explain what you need in as specific of detail as you can. Finally, explain why you need it and describe to the potential donor how they can complete the donation. Find out more.