Last year alone, Portland-based Columbia Sportswear Co. donated about 6,400 pounds of shoes—some of which otherwise might have been scrapped—to nonprofits including Seattle-based World Vision and Portland-based Mercy Corps.

Shoes, gear, and outerwear, including production-quality samples and excess inventory, were distributed to people in need around the world through the nonprofits' existing networks, so Columbia Sportswear didn't have to research potential recipients or pay exorbitant shipping and tariff costs. And because the donations were made to U.S.-based nonprofits, Columbia qualified for a tax break.

"They've saved not just Columbia's (products), but tons of products from going into landfills around the world," says Scott Welch, corporate relations manager for Columbia.

As nonprofits and their corporate donors struggle with the lingering effects of the recession, some companies are stepping up noncash contributions, ranging from employee time to free software, clothing, and food.

In-kind contributions are boosting the total pool of donations received by nonprofits, and in some cases helping to offset declines in cash.

But in-kind donations have their own challenges and drawbacks, ranging from the need for storage space to legal knowledge about how the products can and can't be used. Such donations may require more planning, coordination, and communication between nonprofits and corporate donors than their more flexible cash counterpart.

At Seattle-based relief and development organization World Vision, gifts in kind increased by more than 9 percent this year. World Vision was on pace to get about $400 million in gifts in kind by the end of fiscal year 2009, compared to about $366 million for fiscal year 2008. Meanwhile, total revenue was up only 3 percent—meaning contributions in kind, such as clothing, school, and office supplies, made up a larger share of total contributions this fiscal year.

Nationwide, nonprofits are seeing more in-kind contributions as well. In a survey conducted this summer by Stamford, Conn.-based LBG Research Institute Inc., half the corporate respondents says they were more focused on partnerships with nonprofits rather than straight cash donations. Twelve percent of respondents say they were increasing donations of their own products, and 15 percent say they were increasing in-kind donations in areas such as office equipment and meeting space. Those increases happened despite the fact that about half of corporations and half of corporate foundations reported declines in their overall giving budget.

Indeed, in another noncash category, more than 84 percent of companies say they were promoting more employee volunteerism specifically to offset a decline in financial contributions.

During 2008, "noncash giving shot up like a rocket" among companies that increased their total giving, says Margaret Coady, director of the New York-based Committee Encouraging Corporate Philanthropy, an international network of corporate leaders.

About 53 percent of the companies in the organization's study had increased their giving, and among those companies, noncash giving increased by about 29 percent.

Coady says it appeared that companies were seeking creative ways to support nonprofits. Corporations always have had resources, particularly in in-kind contributions that other donors don't have. And in some cases in-kind contributions may have made more sense for corporations.

"There are a million competitive needs for cash within a company," she says. "As cash became more scarce, philanthropy was not exempted."

In some cases, too, corporations may have had some excess inventory on hand as a result of declining customer demand, Coady says.

Product donations—like excess inventory from last summer's fashions by a clothing company—can not only free up storage space but allow companies to qualify for tax benefits.

Columbia's Welch says that he believes nonprofits are becoming more sophisticated about requesting in-kind donations.

"I'm starting to get more educated proposals," he says.

To be sure, many corporations are making noncash donations more as a result of longstanding initiatives rather than a short-term response to the recession.

Microsoft, for example, gives away hundreds of millions of dollars in free software to nonprofits each year. In 2008, the company contributed about $500 million to nonprofits. About $140 million of that was cash and the balance was in-kind contributions, says Akhtar Badshah, senior director of global community affairs.

"We don't see it as an either-or," he says. "Nonprofit organizations want our software, and we offer it to them at no cost."

Badshah says that nonprofits are able to put the money they save on software to other uses, such as development and salaries.

"It becomes unencumbered money," he says.

Other kinds of product donations take up more space than software and require a more sophisticated management system. World Vision, for example, has a storehouse with room for storage and an inventory-management system in Fife that distributes new, high-quality surplus inventory to 150 smaller nonprofits throughout the Puget Sound region.

World Vision also provides a training session to those partner nonprofits about how to appropriately use in-kind donations, according to spokeswoman Karen Kartes.

For example, the law doesn't allow a nonprofit to sell, trade, or barter any in-kind contributions, but small organizations may not know that.

The Committee Encouraging Corporate Philanthropy's Coady says that in some cases, corporations may need to work with nonprofits to make sure they can handle an influx of in-kind donations, Coady says.

"(A nonprofit) might say I could use those computers, but right now I don't have the storage facilities," she says.

The nonprofit needs to be able to talk candidly with corporate donors, which can be awkward.

"You never want to turn down a donation," she says.