How to Handle and Document In-Kind Contributions in Grant Proposals
Comprehensive Guidelines
When writing grant proposals, one crucial element that often gets overlooked is the handling and documentation of in-kind contributions.
In-kind contributions can make a significant difference in the strength of your proposal and are a way to demonstrate your commitment to the project.
So, what exactly are in-kind contributions, and how do you effectively document them in your grant proposals?
In-kind contributions are non-cash donations made to a project, often including services, goods, or time, which hold a tangible value.
These contributions can come in many forms, such as volunteer labor, donated office supplies, or pro bono services from professionals.
Many grant-giving organizations look at in-kind contributions as a sign that a nonprofit or organization is invested in the success of the project, even if the project’s budget doesn’t fully reflect the total value of what is being contributed.
Why In-Kind Contributions are Important in Grant Proposals
In-kind contributions are not only a sign of your organization’s resourcefulness and commitment, but they can also help meet the total budget of your proposal, especially when cash funding is limited.
For example, if you’re submitting a grant proposal for a community project and your total project costs amount to $50,000, but you’ve secured $10,000 in in-kind contributions, this could reduce the amount of funding you need to request from the funder.
Funders often view in-kind contributions favorably because they show that you’re receiving support from the community, partners, or individuals who care about the project.
It also reflects the sustainability of your project because it illustrates that your project is backed by various stakeholders, all working together for the common goal.
Forms of In-Kind Contributions
In-kind contributions come in many forms, such as:
Volunteer labor: Time spent by volunteers working on your project, whether it’s managing logistics, providing administrative support, or directly working with beneficiaries.
Donated goods and services: Items such as office supplies, equipment, or event space. Professionals may also donate their services, such as legal counsel, graphic design, or marketing expertise.
Facility usage: Donating the use of a building or venue for meetings, events, or services.
Technology or software: Donations of software programs, apps, or other technology services that are used in the project’s implementation.
How to Effectively Calculate In-Kind Contributions
Calculating in-kind contributions can be tricky, but it's essential for accurately reflecting the value of these resources in your grant proposal.
Here are the main steps to take when calculating in-kind contributions:
1. Identify the Source of the Contribution
The first step is identifying the source of the in-kind contribution. This could be individuals, businesses, or other organizations providing resources to support your project. Record the full name, contact information, and role of the contributor.
2. Value Volunteer Labor
One of the most common in-kind contributions is volunteer labor. The value of volunteer hours is typically calculated based on the prevailing hourly wage for a similar position in your community or industry.
For instance, if a volunteer is performing administrative tasks that would normally be done by an administrative assistant, the volunteer’s hours are valued at the going rate for that role.
You can check the Independent Sector’s national volunteer rate to get an estimate of the value of volunteer time.
For example, in 2023, the national value of a volunteer hour was estimated to be $29.95. If a volunteer works 20 hours a week for your project, that would equal $599 in in-kind contributions.
Example Calculation:
Volunteer work (20 hours per week at $29.95 per hour):
$29.95 x 20 hours = $599 per week
3. Document Donated Goods and Services
For donated goods and services, calculate the market value of these items or services. For example:
If a company donates 100 boxes of office supplies, determine the total cost of those supplies by checking prices online or asking the supplier for the value.
If a graphic designer provides their services pro bono, check the going rate for similar services in your region and calculate the value of their time based on how many hours they contribute to your project.
Example:
Donated office supplies (100 boxes valued at $10 each):
100 boxes x $10 = $1,000 in-kind contribution.Pro bono graphic design services (valued at $50 per hour for 10 hours):
$50 x 10 hours = $500 in-kind contribution.
4. Document the Fair Market Value for Donated Facilities
When facilities are donated, the value of the space should be calculated based on the typical rental rate for similar venues in the area. Include the number of hours or days the space will be used for the project.
Example:
Donated meeting space valued at $100 per day for 5 days:
$100 x 5 days = $500 in-kind contribution.
5. Sum Up All In-Kind Contributions
Once you’ve calculated the value of all in-kind contributions, total them up to include the overall in-kind value in your grant proposal. This total will show the funder the full value of your project and help demonstrate the support you’ve garnered.
Example:
Volunteer work: $599
Donated office supplies: $1,000
Pro bono graphic design: $500
Donated meeting space: $500
Total In-Kind Contribution: $2,599
How to Present In-Kind Contributions in Your Proposal
The way you present in-kind contributions can make a difference in how funders view the support your project has gathered.
Here's a simple, clear structure for presenting in-kind contributions:
Create a Separate Section: Dedicate a section in your grant proposal specifically for in-kind contributions. This allows funders to quickly understand the resources you’ve secured.
Be Specific and Detailed: Clearly list the types of in-kind contributions you’ve received, including the contributors’ names, the types of goods or services provided, and the estimated value.
Provide Supporting Documentation: Some funders may ask for proof of the value of in-kind contributions. This can include volunteer time logs, thank-you letters from businesses or service providers, or quotes for donated goods.
Example In-Kind Section:
Volunteer labor (estimated 200 hours):
Volunteers for administrative support: $5,000 (200 hours at $25/hour)
Donated office supplies:
Office supplies from OfficeCo: $2,000
Pro bono legal services:
Legal advice on contracts and liability: $1,500 (10 hours at $150/hour)
Donated event space:
Meeting room provided by Local Center: $500 (5 days at $100/day)
Total In-Kind Contributions: $9,000
Common Pitfalls to Avoid When Documenting In-Kind Contributions
Overestimating the Value: Always ensure that the values you present are fair and based on reasonable market rates. Overestimating the value of in-kind contributions can jeopardize the credibility of your proposal.
Not Documenting Contributions Properly: Failing to maintain proper documentation for in-kind contributions can lead to confusion. Always keep detailed records of time logs, donation receipts, and written agreements from contributors.
Underreporting Contributions: In-kind contributions are a vital part of the funding equation. Don’t downplay their significance. Properly reporting all in-kind contributions shows that you have a robust and sustainable project plan.
How In-Kind Contributions Help Your Grant Proposal
In-kind contributions can make your grant proposal stronger by:
Demonstrating community or partner support.
Reducing the amount of cash funding required.
Reflecting the sustainability of your project.
Showing that your organization is committed and resourceful.
Funders want to see that your project is feasible and that you have the resources to carry it out.
In-kind contributions can serve as a "value-add" that can tip the scales in your favor.
Final Thoughts
When it comes to writing a grant proposal, effectively handling and documenting in-kind contributions is a must. These contributions provide a crucial way of demonstrating your project’s value and its community support.
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