TLDR
In-kind contributions are donated goods, services, space, or labor; when used as match, they need fair-market valuation and contemporaneous documentation.
In-kind contributions are one of the most frequently misunderstood compliance areas in federal grant management. The misunderstanding is usually in the direction of assuming that “in-kind” means “less rigorous.” It does not.
How it works
In-kind contributions are non-cash resources provided to a grant project. The common forms:
Volunteer labor. Services provided by individuals without compensation — or compensation lower than fair market value — for work that directly supports the grant-funded program. Volunteer lawyers providing free legal assistance, community health workers contributing unpaid hours to a federally funded outreach program, or board members donating their time to a grant-supported initiative. All are valued at the fair market rate for the service, supported by contemporaneous time records and wage documentation.
Donated goods. Physical materials donated to the grant project: office supplies, program materials, equipment, food for program participants. Valued at current market price, documented with an invoice or appraised value from the donor.
Donated equipment. Equipment contributed for use on the project without charge or at below-market rates. Valued at fair market value for equipment of comparable age and condition.
Donated space. Office space, meeting facilities, program space contributed at no cost or below-market rates. Valued at a documented fair rental rate for comparable space.
The documentation requirement
The regulatory requirement under 2 CFR 200.306(b) is explicit: in-kind contributions must be “verifiable from the non-Federal entity’s records.” This is not a softer standard than the requirement for cash expenditures — it is the same standard.
For volunteer labor: the record must show who provided the service, what service was provided, when it was provided, how long it took, and what the fair market rate is for that service. A sign-in sheet with names and hours satisfies part of this. A wage comparison document showing the market rate satisfies another part. The signature of the volunteer (confirming the hours) and a supervisor (confirming the work was performed) complete the record. All of this must be dated at the time the service was provided — not reconstructed from memory at the end of the grant period.
For donated goods: the donor’s invoice or a market comparison showing current price, plus documentation that the goods were received and used for the grant-funded program.
For donated space: a signed use agreement, a documented market comparison for rental rates in the same area, and records of when the space was used for grant activities.
Why auditors look carefully at in-kind
In-kind match is a common audit focus because the documentation is more easily fabricated than cash documentation. There is no bank record, no canceled check, no vendor invoice with a transaction date. The record exists only because someone created it.
Auditors confirm in-kind documentation by looking for contemporaneous creation: are the sign-in sheets dated on the day of service, or are they all dated the same day three months later? Do the volunteer hour totals in the time records match the claimed match amount, or do they conveniently sum to exactly the committed amount with no variation? Is the fair market valuation based on a documented comparison, or was a rate selected because it produced the required dollar total?
Organizations with robust in-kind documentation practices create records as the service is provided — not as an end-of-grant exercise. The contemporaneous record is both more credible and more accurate.
See also
- Cost Share — the broader category that includes both cash and in-kind match
- Matching Funds — often used interchangeably with cost share in grants management practice
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Q&A
How is volunteer time valued for in-kind match?
Volunteer time is valued at the fair market rate for services comparable to those provided by the volunteer. A licensed attorney volunteering legal services is valued at the prevailing market rate for legal services in that area — not at minimum wage. The valuation must be documented: a comparison to a published wage rate, a rate schedule from a professional association, or documentation of what the organization would pay for the same service if purchased. The documentation must be contemporaneous — created at the time the service was provided, not reconstructed afterward.
Q&A
Can donated space count as in-kind match?
Yes. Donated space (office space, meeting rooms, program facilities) can count as in-kind cost share when the organization using the space documents a fair rental value. Documentation typically includes a signed space use agreement, evidence of the rental rate for comparable space in the same area (from market listings, lease comparables, or a documented appraisal), and records showing the space was actually used for the grant-funded program during the documented periods.
Q&A
Is in-kind match easier to document than cash match?
No. The documentation requirements for in-kind match are the same as for direct cash expenditures — verifiable, contemporaneous, and sufficient to allow an auditor to confirm the value and the connection to the funded program. In practice, in-kind is often harder to document because there is no financial transaction to anchor the record. Organizations that treat in-kind as a documentation shortcut rather than a compliance obligation discover the gap at audit.
Q&A
What happens if in-kind contributions fall short of the committed amount?
A shortfall in committed in-kind cost share is a compliance finding with the same consequences as a cash match shortfall. If an organization committed $50,000 in volunteer hours in the grant application and can only document $35,000, the federal agency may reduce the federal award proportionally to account for the unmet match. The reduction is based on the shortfall relative to the required match percentage, not the total committed amount.