"Exploiting" the In-Kind Donation Bias

When Russia attacked Ukraine in February 2022, the eastern Polish border, through which the Ukrainians started to flee from the conflict was overflowing with humanitarian aid. Principally with items that might be helpful to people who packed in a hurry and are now stepping into a foreign country. Most of the aid however, was redundant and the humanitarian NGOs begged people not to come to the border and not to bring gifts.

What happened there happens in many cases of disaster relief and it even got its own name - “material convergence”, a “second-tier catastrophe” in and of itself.

One of the main reasons behind this is something I’ll call here the “in-kind bias” - the preference, among donors, to give material goods or perform services, instead of donating money.

It's not just a disaster-relief problem. It is also visible when corporations do CSR days, or how people put up things for charity auctions. The question is: why does giving stuff feel so much better than giving cash?

A handful of reasons, in my opinion:

• Warm glow - money feels cold and harsh or even lazy, in terms of time and attention required to share it, compared to spending some more time actively, “heroically”, delivering the supplies. Dropping canned goods into a basket feels more like “feeding the hungry” than setting up a recurring payment.

• Paternalism - most people believe that recipients would spend cash assistance inappropriately. I don’t think this is justified - yes, cash transfers do get spent on entertainment or addictions sometimes, but the effect is wildly overstated - GiveDirectly shows cash recipients mostly spend wisely. The bias persists anyway because it feels true, and one anecdotal evidence can, for many, spoil the whole idea of aid.

• Low trust in NGOs - some people still think that most NGOs (except the ones they support obviously) are tax-evasion schemes. There’s also a belief that no-one should be paid for doing non-profit work and any mention of overhead is putting off an average donor.

• Optics - money donations are only impressive when they are huge, and even then they are scrutinized - “it should’ve been more”, “it’s unethically earned anyway” or “it’s probably for tax benefits”. Some think you shouldn’t even brag about donating. But sacrificing your time and doing the work with your hands is something that’s more visible and not perceived as a fiscal scam or “rich people doing bare minimum”. It IS impressive and you CAN brag about it - you were there, you did some manual work, you delivered the blankets. The real value is hard to estimate and therefore can’t be compared with money. No one can tell if it would’ve been better to donate $20 instead.

This might sound like I’m calling out the irrationality, but giving is emotional, it requires us to act on empathy, so it’s reasonable it’s not perfectly rational, and other emotions try to play their role. Still, the gap, between what people are willing to give in kind versus what they are willing to wire as cash, is real and large.

What if instead of fighting this bias, we designed around it?

The reason I think this bias can be exploited is because I believe it’s strong enough to make people willing to effectively provide more value than they would be willing to donate if represented as cash out of their own pocket.

People who, if asked to work a Saturday overtime, would expect 1.5 or 2x their hourly rate valuing their free time quite highly (as you should). Yet they'll spend that same Saturday doing manual labor for charity at a fraction of the effectiveness. It's not that it’s wrong to do it - impact aside, CSR days build team bonds, feel good, and get people outdoors. But the math reveals how powerful the in-kind bias is.

Not only are people more likely to do unpaid work in their overtime for charity - they are also happy to part with things they wouldn’t sell.

WOŚP (Wielka Orkiestra Świątecznej Pomocy) is Poland’s biggest annual charity event - a fundraiser that’s been running for over 30 years and raised billions of złoty. People volunteer their time to run it, but they also donate unique items to be auctioned off: trophies, signed memorabilia, props from movies or experiences like having a book character named after you or dinner with an actress. Those are things you normally can’t buy and it feels off to sell them on the market if it weren’t for charity.

The “scheme” I want you to consider is:

1. accept in-kind donations, saying it’s for the cause

2. monetize them,

3. donate the money to the cause, keep some for overhead;

It’s obvious, yet I think we could have more initiatives like this that don’t try to actually exploit the donors.

Additionally, as I consider myself a member of the EA community, I would love the output of initiatives following this model to fuel highly effective charities.

It might seem like a dishonest approach, but it’s not if you are open about how you are doing this - i.e. the donated items are not literally being used for the cause. Don’t tell people you collect clothes “for Africa” if that doesn’t mean literally shipping them. It’s ok though if you mention how for each item of clothing you donate 1$ towards anti-malaria vaccines.

The interesting question is why it could work better than we expect.

I think that you can design asks around in-kind contributions that donors find satisfying but that also match your actual needs. There are some mechanisms or biases that work for this model.

If you don't tell people they're indirectly monetizing the thing they donate, you can get them to offer up things they'd never put on the market themselves.

A professional sportsman selling his trophies or recording birthday-wishes videos for cash? That screams "are they in debt?". But doing it for charity is noble.

Same with personal data which we hand over to tech companies constantly, but most people would never go out of their way to click "send my shopping list to this retail chain for $0.05." It feels transactional in a way that violates some unspoken rule. Yet scanning a receipt in an app that donates the equivalent to charity? That's fine, even good.

The charity framing acts like a purifier - it removes the “it feels weird”, the sense that you're selling out or selling yourself. Which means there's a whole category of value that only feels okay to monetize for the right cause.

Sometimes monetizing what you have doesn't make sense at the individual level. And there's a lot of it because we caught the minimalism bug and started to care more about recycling, so we have boxes of stuff we want gone but can't be bothered to sell, and living space keeps getting more expensive.

Taking a handful of old clothes or books, scanning them, assessing their value, writing up an offer, and waiting for a buyer is hours of work for maybe a few dollars. People on Vinted spend entire evenings photographing and listing items worth less than their hourly wage, and they never do the math.

An intermediary org changes the economics completely.

First, the obvious: overhead gets lower with volume. Collect 500 shirts and you move them in bulk to a wholesaler. Collect 2,000 books and you can automate the boring parts - intake, categorization, listing, pricing - in ways no individual seller would bother building for their own one-time sale.

Second, volume gives you negotiation power that individual sellers never have. You can bundle complementary items, time your sales to match demand, and not accept first bad offers because a little bit of waiting is worth it now.

And third - the “middle-man’s secret” - you're sitting on data from both sides of the transaction. You gather data on what donors tend to give, when they give it, and in what condition. You track what buyers want and what they'll pay.

Over time, you can steer your collection campaigns toward what actually sells, suggest donation categories donors hadn't considered, and match supply to demand in ways that neither side could do on their own.

In “it’s for charity” context, normal economic logic gets suspended on both sides of the market.

A seller instead of spending weeks on Vinted trying to squeeze out every last dime for their old jacket will happily drop a bag of clothes at a donation point without asking what it’ll go for. The charity framing makes people more forgiving. They won’t demand you appraise their stuff accurately, and they will part with things more easily than they would do with an equivalent amount of money, because it’s not in the picture.

On the buyer’s side, this works, but differently. You’re not just a seller, you’re a “positive impact org,” and that’s a slight advantage in the marketplace. Call it the charity premium: sellers undervalue what they part with, buyers pay more, and the org in the middle captures a margin that wouldn’t exist in a normal transaction.

There are already initiatives that follow this model, with varying degrees of success:

Ubrania do oddania lets you donate used clothes and choose which fundraiser gets the proceeds. It’s a clean implementation of the accept→monetize→redirect pipeline, though it's limited to a single item category.

PanParagon, a receipt-scanning app, ran a limited time campaign where scanned receipts could support a fundraiser. But the design was awkward as there was no clear conversion rate between receipts and donation amounts, the total pool was under $10k, and the whole thing felt like an afterthought bolted onto the app's core function. Btw. if it’s not clear how, just trust me, someone who has worked in data science for retail, when I say that receipt data is highly valuable for producers.

A more interesting case is SkupSzop.pl, a platform that buys and sells used books. They give sellers the option to redirect their payout to one of two charities. So far, less than 0.5% of sellers choose this option which sounds super low, but I think it's not their core model and I’m not sure when they started to offer that. It’s not a proof that the model doesn't work. The charity option is buried, it's opt-in, and you can only pick from two organizations. Design choices in the conversion funnel probably matter more here than the underlying willingness to give.

Of course, sometimes you can skip the monetization step entirely. If what an NGO needs happens to be what someone is willing to provide in-kind, just connect them directly. Tech To The Rescue and TechSoup already do this for software and dev work.

But nobody's doing it systematically for the less obvious stuff like office space, equipment, professional services. Imagine a "desk for NGO": a program where companies share hot desks or dedicate a few days a month of conference room access. It counts as CSR for the company, and it gives small NGOs something they desperately need but would never prioritize spending cash on. The problem here isn't technological, it's that no one's doing this yet. Maybe it’s a miss, but maybe it’s worth exploring.

The in-kind bias is real, it's strong, and it's not going away. You can either fight it (endlessly explaining to everyone why cash is king) or you can work with it.

This isn’t a pitch for direct-work NGOs to experiment with their fundraising strategy. It’s for the tinkerers who like finding clever, meta/ecosystem-building ways to expand the charity funding pool. If you’re the kind of person who reads this and thinks “how do I use this?” I’d be glad if you took this idea seriously for at least a bit, and explore specific use cases. Design asks that let people give things, time, experiences, data. Build the intermediary infrastructure. Then redirect everything to priority causes.