In-Kind Donations & Non-Federal Share: A Nonprofit How-To Guide

In the ever-complex world of nonprofit management, few topics create as many strategic questions, flashes of anxiety, and eye-glazing conversations as “in-kind” and “non-federal share” requirements. Yet for many organizations—especially those powered by federal grants—understanding these concepts and putting them into action is crucial not just for compliance, but for organizational sustainability and community credibility.

Let’s break down what in-kind and non-federal share really mean in the context of your nonprofit. Then, we’ll dig into practical strategies you can use to set up systems that don’t just help you meet your goals, but let your mission thrive along the way.

What is In-Kind? (And Why Should Nonprofits Care?)

In-kind refers to non-cash donations: goods, physical materials, or professional services given to your organization instead of monetary gifts. Instead of donating $1,000, a local business might provide free office space for a program year. Or a community member might donate software licenses, boxes of produce, or pro-bono legal help.

What makes in-kind powerful is that these donations offset expenses that your nonprofit would otherwise pay with cash. When tracked and valued correctly, these contributions become essential for operations, grant reporting, and sustainability. For many federal grant programs, in-kind contributions can even meet critical match requirements, which means they’re not just “nice to have”—they’re often required for your funding.

Non-Federal Share—The Match That Matters

Non-federal share is the financial or in-kind contribution your organization makes to complement federal grant dollars. Think of it as the grant’s “buy-in”—the portion of your project costs you must cover from sources other than the federal government. If your Head Start grant covers 80% of your yearly costs, your agency is expected to bring 20% to the table, whether that’s in cash, in-kind, or both.

The non-federal share underscores an important principle: partnerships are at the core of federal funding. Policymakers want to see that nonprofits are tapping into community resources, not relying on public dollars alone. That makes documenting your in-kind match just as high stakes as tracking your cash spending.

Federal Grants, But Not Federal-Only

Many nonprofits new to the world of federal grants are surprised by match requirements attached to their awards. These rules come from Uniform Guidance, agency regulations, and each grant’s Notice of Award. The standard split is often 80% federal funds and 20% non-federal share, but variations exist. The catch? If you don’t meet your match, you risk payback, clawbacks, or even disqualification in the next grant cycle.

Common In-Kind Contributions: Real-World Examples

Let’s translate the jargon into action: what kinds of resources count as in-kind for your nonprofit? The most common categories include donated goods, services, space, equipment, supplies, and volunteer labor. A local grocer donating produce for your food bank, a CPA donating two hours a month to review financials, or an architect giving building assessments for free—all are classic examples. Even the rent-free use of a church hall for afterschool programs can be counted if you can document and competitively value its use.

Goods vs. Services: Knowing the In-Kind Basics

Goods are tangible items: school supplies, building materials, food for community events, or technology equipment. Services are the time and expertise professionals lend to your work: legal advice, marketing redesign, IT consulting, translation, tutoring, or data analysis. Both categories unlock major savings and can expand your capacity—if you have a plan to use and report them.

Why In-Kind Matters for Mission-Driven Teams

Too many organizations see in-kind as “side support,” but it’s mission fuel. When you redeploy $2,000 worth of donated computers, that’s cash you can use to hire an outreach worker, run an extra program, or shore up your reserves. In-kind gifts often open up relationships with donors who become cash supporters over time. And tracking in-kind signals to funders that you know your true costs down to the resource level—not just the cash that hits your bank account.

When Is In-Kind Eligible? Challenges and Compliance

Eligibility is where it gets technical. For federal grants, not all donations “count.” The in-kind match must directly benefit the project funded by federal money, not be double-counted elsewhere, and must be reasonable and necessary. The valuation of goods and services needs to align with market rates, and proper documentation is a must for any kind of audit. Following grant-specific language, such as that in Uniform Guidance, ensures your in-kind support will hold up to federal scrutiny.

Building the Right Culture: Everyone is on the In-Kind Team

Meeting your in-kind and non-federal share isn’t just a job for finance or the grant manager. It takes a whole-organization approach: program staff who source and document donations, board members who open doors to community partners, and volunteers who advocate in the community. The best systems incentivize everyone to “think in-kind” as they spend, budget, and engage supporters.

Avoiding Common Pitfalls: Documentation and Valuation

In-kind is only useful when substantiated with clear records. If you can’t prove the donation’s value with third-party quotes, appraisals, or proof of fair market rates, you risk losing your match or even repaying funds. Train your team to get commitment letters, detailed invoices, and time logs for services. Remember, you must avoid overvaluing volunteer labor (“an attorney painting the office counts as unskilled work, not attorney rates”) and ensure donated space is valued per fair-market-rate appraisal.

Creating an In-Kind Strategy: Know Your Needs

The starting line for meeting your non-federal share is simple: know your match percentage and the dollar amount you must generate. Don’t just look at historic in-kind—forecast needs by project, activity, and season. Chart your cash shortfalls and model how donations of supplies, services, or space can offset your obligation. Build a pipeline of in-kind prospects every bit as strategically as you cultivate major donors.

Mapping Out Your Prospects: Who Will Contribute?

Your best in-kind donors are often hidden in plain sight: parents, local businesses, professionals, and even passionate board members with access to goods or skills. Community groups, service clubs, and even competitors willing to loan equipment for shared goals can help you build a diverse match portfolio. Using your CRM or supporter database, flag employment data—many businesses have employee volunteering or product donation pipelines you can tap.

Making the Ask: Tailoring Your Approach

The most successful in-kind asks are specific. Instead of a generic call (“Can you donate services?”), outline the direct impact (“We’re looking for a local marketing firm to donate five hours of content creation for our new campaign”). Link the request to your mission and report on results. Script out compelling language for board, staff, and volunteers so every interaction turns into an opportunity.

Sustaining Partnerships: Stewardship Next Steps

Acknowledging in-kind donors should be as robust as your cash giving stewardship. Provide documentation of tax eligibility, make public thank-yous that respect privacy as requested, and show donors the real difference their support made. Many organizations find that honoring in-kind gifts with “impact stories” turns one-time supporters into recurring givers—essential for long-term sustainability.

Tracking and Reporting: Systems That Work

Manual tracking with spreadsheets gets unwieldy fast, especially for grant-matching. Hold yourself and your team to a standard by using integrated finance tools that can tag, segment, and report in-kind transactions just as easily as cash spending. If you’re using an accounting system like Sage Intacct or QuickBooks, or leveraging a modern financial platform like Holdings, map out your account codes so you can pull match reports instantly—not after weeks of pulling receipts from a binder.

The Power of Virtual Accounts for Match Tracking

Virtual accounts—sometimes called sub-accounts or cash “drawers”—let you segment your funds by grant, program, or match requirement. With Holdings, nonprofits can create unlimited virtual accounts to keep grant dollars, match dollars, and unrestricted funds separate, even if they all sit in one actual bank account. This prevents accidental “double dipping” and gives you clear, auditable reports to show your funders your in-kind and non-federal share were used as intended.

Cards for Program and Volunteer Spending

For many teams, a major challenge is that volunteers and program leaders need to spend on behalf of the organization, but reimbursements slow everything down. With real-time controls and easy reconciliation, issue a Holdings card to track specific match spending—whether on supplies, transportation, or refreshments. This increases compliance and makes documentation simple.

Integrating Cash and In-Kind in Your Workflow

Think beyond the checkbook: the future of compliance is having all financial activities—cash, in-kind, volunteer hours—showing up in one easy dashboard. If you already rely on modern accounting software, Holdings can work alongside it to capture bigger-picture data and offer cleaner bridge reports for board, audits, and funders.

Catching Up on Backlogged In-Kind? Get Bookkeeping Support

Sometimes, keeping up with documentation falls behind for understandable reasons—staff changeover, busy seasons, or uncertainty about valuation. Don’t let this become a compliance risk. Leverage bookkeeping services that know nonprofit requirements and can catch up and “clean” your in-kind records so every dollar (or donated chair) counts when it matters.

Building the Plan: Start With Clarity and Accountability

An effective in-kind plan is more than a list of “nice to haves.” Map your match requirement to the grant budget, then plot out possible in-kind sources, the estimated value of each, who will be responsible for securing it, and by when. Share this matrix not just with finance, but with program staff, development, and leadership. This transparency helps everyone see where you’re strong and weak as you approach reporting deadlines.

Communication Tools: From Intake to Acknowledgement

Smooth workflows are built on communication. Use digital tools to create intake forms (for goods, services, or volunteer hours), auto-acknowledgement templates, and shared folders for receipts and value documentation. Whether you’re a massive team or a single program leader with simple tech, clarity trumps complexity every time.

Training and Culture: Bringing the Team Along

Train everyone—staff, volunteers, board—in what qualifies as in-kind and why it matters. Share “dos and don’ts” so appreciation events, pro-bono services, and space usage are all tracked right from the start. Make it routine to check that every donated good or service comes with clear documentation. Use internal communications and staff meetings to celebrate wins (“we just secured $10,000 in donated ad space!”) and to rally for shortfalls.

Getting Board Buy-In

Your board sets the tone for in-kind culture. Help them understand that in-kind match is not a nice-to-have, but an essential ingredient in program sustainability. Arm board members with information and scripts so they’re confident championing match asks in their networks. Regular “match status” updates in board meetings keep attention on compliance and foster creative thinking for new sources.

Valuing Volunteer Time: Strategies and Limits

Volunteer time is a classic form of in-kind contribution, but it must be valued appropriately—usually at market rates for the work undertaken, not the person’s typical profession. Make sure your approach aligns with grant requirements to avoid overstatement. For example, if a computer engineer stuffs event envelopes, their time should count at the going rate for clerical support, not their usual hourly wage.

Donated Space: Navigating Appraisals and Documentation

The value of donated office, storage, or meeting space should be backed by a fair-market appraisal—often from a certified provider, not a real estate agent or donor estimate. This valuation must be updated regularly (every three years is common), and should include all elements donated: rent, utilities, maintenance, and shared equipment. Transparency is your best defense if questioned by funders.

When To Seek a Waiver

Despite best efforts, sometimes your community can’t generate the required match due to extraordinary circumstances such as natural disasters, economic downturn, or major demographic changes. When that happens, know how to request a waiver from your funder, and assemble strong, timely documentation to support your case. But waivers are never guaranteed, so focus your energy on sustainable match-building wherever possible.

Handling Objections: Clear Communication Wins

Many potential supporters assume that a “federally funded” organization doesn’t need community support. Be honest and transparent: federal funds are only part of the picture, and every dollar of in-kind match means greater impact for your shared community. Use this as an opportunity to educate and connect people to your mission in meaningful ways.

Stewardship: Show Impact, Not Just Gratitude

Post-donation, communicate clearly how in-kind gifts made a difference. Impact stories (“Thanks to donated laptops, teens in our afterschool program developed career skills”) resonate and build ongoing partnerships. Go beyond a thank-you by involving in-kind donors in your programs—invite them to see the impact, follow up with outcomes, and spotlight their generosity in annual reports.

Keeping Data Clean: Audit-Ready at All Times

Good data and documentation protect your mission and your funding. Store receipts, appraisals, and correspondence digitally and back them up. Conduct regular internal reviews so your in-kind data matches your cash records, and run annual “valuation audits” to spot issues before your funder or auditor does.

Leveraging Modern Financial Tools

Modern tools like Holdings are a game-changer for busy nonprofits juggling in-kind, cash, programmatic spending, and grant compliance. With 2% on all balances and no banking fees, you multiply your impact. Virtual accounts empower you to segment cash by source or restriction, meaning you can instantly see how much you’ve dedicated (and spent) for each match requirement.

Empowering Your Team with Virtual and Debit Cards

Equip your staff and volunteers with virtual or debit cards tied directly to designated virtual accounts. Policy-controlled cards allow for easy, safe, and accurate spending that’s tracked and sorted against your budget and grant requirements—no more guessing which purchase applies to which match.

Centralizing Documentation for Simpler Audits

Centralize your in-kind documentation in a secure, accessible system. That could mean integrated digital bookkeeping with Holdings, syncing records to your accounting software, or simply organizing cloud folders by grant and fiscal year. The goal: make your next audit a formality, not a scramble.

Reporting Confidently—to Funders, Board, and Community

When it’s time to report, your system should make it easy to pull together in-kind, cash, and non-federal share reports by grant, timeframe, or program. With modern platforms, generate instant, shareable reports that make your compliance and stewardship efforts shine.

Celebrating the Match—It’s a Whole-Organization Win

Hitting your in-kind and non-federal share requirements isn’t just about compliance. It’s about proving to your community, board, and funders that you run a resilient, collaborative, and accountable organization. Celebrate these wins. Recognize those who made it possible and use the momentum to fuel your next campaign or grant application.

Always Room for Growth

Even organizations with a strong track record for in-kind and non-federal match can improve. Regularly revisit your processes, audit valuations, and spot new opportunities in your network. Stay curious and proactive—there’s always room to expand the community of partners who support your mission.

In-Kind and Non-Federal Share Aren’t Just Paperwork—They’re Tools for Impact

Tracking, valuing, and meeting your in-kind and non-federal share requirements is about more than checking grant boxes. It’s a statement about how you build partnerships, rally community resources, and stretch every dollar for maximum impact. Thoughtful systems and technology make this possible for even the leanest teams, and create the transparency and accountability needed to keep doors open for years to come.

Next Steps—How Holdings Can Simplify the Journey

On a practical note, if your organization is looking to streamline not just your in-kind tracking but your full financial workflow, explore how Holdings can help:

• Open your account with zero fees and start earning 2% on all balances.

• Create unlimited virtual accounts to separate and track cash, in-kind, program, and grant funds automatically.

• Empower team members and volunteers to spend safely and transparently with policy-controlled cards.

• Seamlessly integrate with your existing accounting system or use our exports if you aren’t using Sage Intacct or QuickBooks.

• Rely on expert bookkeeping services when you’re understaffed or behind.

Efficient in-kind and non-federal share management doesn’t have to be overwhelming. With the right culture, systems, and tools, you can turn compliance obligations into genuine collaborative wins. Your team, your board, your funders, and—most importantly—your community will be better for it.

Building and meeting your in-kind and non-federal share is about unlocking abundance, not just meeting minimums. And with the right support, every nonprofit—no matter how lean—can unlock that potential.

While this guide equips you with the fundamentals and practical steps to understand, value, and steward your in-kind and non-federal share requirements, it’s important to remember that every organization’s situation is unique and grant regulations can be nuanced. At the end of the day, we strongly suggest working with the appropriate professionals—such as your organization’s auditor, compliance officer, or a nonprofit-experienced CPA—to review your specific claims, documentation, and valuation approaches around in-kind and non-federal shares. The right professional guidance ensures your practices are both rock-solid for funder audits and tailored to your specific grant requirements.

With the right blend of internal controls, sound advice, and supportive technology, you can confidently meet your match requirements and keep your mission running strong.