Valuing In-Kind Support in the Grant Budget

Grants rarely provide all resources needed to operate a program. The applicant organization generally provides additional support and partner organizations and community members usually supply a variety of donated goods and services. 

“When reviewing grant proposals, funders want to see the full financial picture,” said Barbara Floersch, grant expert and author of the new book You Have a Hammer: Building Grant Proposals for Social Change. “You’ll need to detail the sources and use of non-grant resources that support the program, include them in the line-item budget, and explain them in the budget justification.”

Some supplemental resources are easy to overlook. For example, you can easily forget to include use of office facilities and equipment, use of the agency van, or the time of staff from collaborating organizations. “But capturing the value of all resources that support the grant-funded program is essential in showing the true cost of the work,” said Floersch. “These are real, substantive contributions and the program couldn’t operate without them.”

First, identify every cash and in-kind resource the program will require and document pledges of additional, non-grant support through letters of commitment or memoranda of understanding. “Documenting pledges of cash is pretty straightforward,” said Floersch. “But documenting the value of in-kind goods and services can take some research.”

For some in-kind donations, the calculation is simple. For example, if an outdoor equipment store will provide six canoes, 12 paddles, and 18 life vests for a full day at no cost, ask the store to provide a letter stating that it will provide the resources at no cost and stating the value of the donation based on regular rental fees. If a volunteer will provide dance lessons to seniors, multiply the volunteer hours by the instructor’s regular hourly fee. 

“Be sure to base the value of volunteer time on the tasks they’ll be performing,” said Floersch. “If a brain surgeon serves soup at a local shelter, that time will still be valued at minimum wage.”

Valuing some in-kind donations is less direct. For example, if volunteers take turns cooking meals for a homeless shelter, how should that be valued? For each meal, you’ll have to add up the cost of the groceries, the value of meal preparation time, and the cost of delivering the finished product to the shelter.

Base the value of donated goods and services on actual costs in your geographic area, not on national averages.  “Be detailed and realistic. Don’t inflate or diminish the value,” said Floersch. “Once you’ve settled on a solid, defendable value, make notes of how you came up with the calculation. You’ll use those notes when preparing the budget justification, and perhaps in discussions with funders.” © Barbara Floersch 2021.