3.1 Literature review
Our literature analysis has two foci: we conducted an in-depth review of the comprehensive German-language literature on nonprofit management and fundraising, and we analysed the international literature in a relatively broad and interdisciplinary way in order to draw a first picture of the still fragmentary state of knowledge on in-kind giving. The analysis of standard works on NPO and nonprofit management in the German-speaking countries
1 (e.g., Simsa et al.,
2013; Lichtsteiner & Purtschert,
2014; Helmig & Boenigk,
2020; Lichtsteiner et al.,
2020; Meyer et al.,
2022a) shows that non-cash giving is primarily addressed in terms of voluntary work whereas product donations are only marginally dealt with, if at all. Even if you search the German fundraising literature (cf., e.g., Bangert,
2011; Busse,
2012; Fundraising Akademie,
2016; Urselmann,
2018; Haibach,
2019; Urselmann,
2020), you hardly come across any (detailed) information on the subject of in-kind giving. For example, Haibach (
2019) only refers to gifts-in-kind (from PO) a few times. However, she briefly addresses selected challenges that such goods often entail for NPO: useless donations and valuation and tax law problems. Blümle and Schauer (
2002) as well as Blümle (
2005) also highlight valuation-related issues and Kreh (
2016) warns of legal (tax) pitfalls, which is why tax advice is recommended.
Urselmann (
2018) mentions in-kind donations several times, but briefly. He states that convenient disposal options for goods such as old mobile phones or clothes offer individual donors an additional benefit. He also explains that product giving is usually more attractive for companies because the value of the goods is higher for the NPO than the production costs of the company, which can also save disposal costs. From the NPO’s point of view, they can either use gifts-in-kind directly for their mission-oriented work or use them for sales or at raffles. Even a temporary use of resources (like free rental of crockery or decoration for an event) or (online and offline) infrastructure (e.g., sales and communication channels of a PO) can save expenses and reduce costs. The short article of Andrews and Budde (
2008) addresses pros and cons: goods in kind offer advantages since their collection and transfer/use enable low-threshold contact with stakeholders. Besides, donors can often donate goods without hardship. At the same time, however, they are associated with (usually high personnel, logistical and infrastructure-related) costs. If NPO want to do in-kind donation marketing (charity recycling), then they have to take into account new product developments, (the sometimes strong) competition from commercial collectors/recyclers (esp. of old clothes) and legal conditions (such as environmental and waste-specific laws and regulations). Kreh (
2016) also highlights the increased effort compared to cash donations. Nevertheless, product philanthropy is valuable for NPO, especially since many people and companies are often more willing to donate goods than money.
The practice-oriented publication by Gromberg (
2007) also seems worth mentioning, as it is probably the only (but non-scientific) book on the subject in the German-speaking world to date. It contains many practical examples that also illustrate common problems (e.g., too many, wrong or unusable product donations, or time-consuming collection, sorting and transport). The author’s division into application fields also seems practical. A distinction is made as to whether the donations are collected once as an individual item or repeatedly in bulk, and for what purpose: for the needy (to alleviate their distress), for personal use (by the NPO) or for recycling/resale (Gromberg,
2007).
During the first phase of our review of the international scientific literature, it became apparent that there is hardly any comprehensive work on in-kind donations in general. This is not really surprising, because in view of the heterogeneity of gifts-in-kind and the corresponding complexity of the topic, a synthesis is not an easy undertaking. In addition to a few short articles in practice-oriented journals that mainly dealt with accounting, valuation and planning issues (cf. Brenner,
2013; Hellenius & Rudbeck,
2003; Lafferty & Browning,
1993), we found an informative contribution by Gray (
2007). He gives an overview on the topic including many examples of gifts-in-kind, typical recipients and purposes. Besides, he briefly addresses intermediaries (which can help reduce transaction costs) and highlights that NPO need some competencies for efficiently collecting and managing goods (like, e.g., storage capacity or pick-up and delivery capabilities). The few other identified works mainly focused on corporate product philanthropy, thus on the perspective of corporate donors and their motivations for in-kind giving (which include altruistic motives, but also strategic or instrumental ones based on a corporate social responsibility (CSR) commitment and pragmatic considerations such as reducing disposal/dumping costs). The papers also address some possible constraints (like, e.g., a lack of intermediary services) and challenges related to processing, storing, and transporting product donations as well as to measuring the value and impact of gifts-in-kind (cf. Gazley & Abner,
2014; Lee,
2015; Ross & McGiverin-Bohan,
2012).
At second glance, however, we were able to identify even more relevant works by deliberately broadening the research focus in terms of different types of product donations and fields of application as well as disciplines. By synthesizing the results of this second review phase, we can derive some strands of literature and research. For instance, we were able to identify several papers on used clothing (cf., e.g., Ha-Brookshire & Hodges,
2009; Persson & Hinton,
2023), on in-kind giving in disaster response (Islam,
2013; Islam et al.,
2013) as well as in education settings like academic libraries (Canevari de Paredes,
2006), on organ donations (Ojo et al.,
2004), on blood donations (Healy,
2000; Hyde et al.,
2022), human milk donations (Oreg & Appe,
2022), and on food aid/donations with a focus on food banks (Baglioni et al.,
2017). This last example is part of what is perhaps the broadest strand we have identified and that we term charity recycling and retail. In addition to food banks and soup kitchens, this group or strand also includes social cafés, coffee shops or restaurants as well as social markets (see subsection 4.2.2.). In charity retail, second-hand markets, venues or outlets like flea markets (cf. Sherry,
1990; Stötzer et al.,
2020; Tranberg Hansen & Le Zotte,
2019) as well as charity shops (also named thrift stores or sometimes nonprofit stores) are further important areas of application for non-cash philanthropic contributions. Such shops have already attracted comparatively much scientific attention (cf., e.g., Chattoe,
2000; Horne,
2000; Horne & Maddrell,
2002; Montgomery & Mitchell,
2014; Parsons,
2002; Parsons & Broadbridge,
2004; Shearer & Carpentier,
2015).
3.2 Conceptualization: (in-kind) donation classification and definition
All donations (cash, in-kind, and time) represent asymmetrical exchange relations in which the resource providers are not offered a market-adequate remuneration for their support. When it comes to giving in terms of philanthropic contributions, various gratifications and motives play a role (cf. Andeßner,
2004). Thus, there is no direct consideration or remuneration for (voluntarily granted) cash or non-cash giving (Neumayr,
2022). Table
1 provides an overview of the types of donations and in particular illustrates the variety of non-cash philanthropic contributions as financial surrogates with a special focus on in-kind donations.
Table 1
(In-kind) Donation classification. Source: own elaboration (based on Blümle & Schauer,
2002, p. 6–7; Blümle,
2005, p. 162–164; with own additions)
In a narrow sense, in-kind donations comprise various (mobile and immobile) material goods as product donations, while in a broader sense in-kind giving also includes special forms such as living matter (e.g., blood donations) and intangible (service or usage) rights.
2 Financial surrogates like know-how and relationships/networks are not included due to their character as derivative resources. Overall, in-kind contributions are an important source of resources for many NPO, but their processing often is challenging. Before the next section looks more closely at such challenges, we finally present the comprehensive definition developed for this paper:
In-kind donations are non-cash philanthropic contributions made available to NPO by individuals, companies or other supporters without direct and market-based compensation. In a narrow sense, gifts-in-kind include both movable and immovable material goods or property of various kinds. These comprise (legally) tradable consumables and durable goods (e.g., food, clothing, jewelry, sports equipment or real estate). In-kind donations in a broader sense also include the voluntary provision of living matter (e.g., blood, plasma and organ donations) as well as intangible contributions such as (usage and service) rights. Such financial surrogates support the work of NPO as they help them to accomplish their mission and reduce expenses. On the one hand, NPO can use them directly for their own needs and/or to directly support their beneficiaries. On the other hand, in-kind giving can also indirectly promote good causes if NPO use them for (re)sale and thereby generate income.