In-kind Donations

In-kind donations, also known as gifts in kind, involve contributing non-cash items such as goods or services to a charitable organization. These can include items like furniture, vehicles, or professional services. Proper management and acknowledgment of these donations are essential for both donors and recipient organizations.

Valuation of In-Kind Donations

Determining the value of in-kind donations is primarily the donor’s responsibility. The Internal Revenue Service (IRS) defines Fair Market Value (FMV) as the price that property would sell for on the open market between a willing buyer and a willing seller, both having reasonable knowledge of the relevant facts. For example, used clothing donated to a charity would be valued at the price typical buyers pay for similar items in that condition. 

Donors intending to claim a deduction for non-cash contributions exceeding $500 must file Form 8283 with their tax return. Additionally, for donations over $5,000, a qualified appraisal is generally required. 

Recipient Organization’s Role

While donors are responsible for valuing their in-kind contributions, recipient organizations should provide acknowledgment letters detailing the donated items without assigning a monetary value. This acknowledgment supports the donor’s tax records but does not appraise the donation. 

Managing In-Kind Donations in Planning Center Giving

Planning Center Giving offers features to track and acknowledge in-kind donations effectively. Organizations can record non-cash gifts, send personalized thank-you notes, and include these contributions in annual statements. Detailed guidance on managing in-kind donations within Planning Center Giving is available here:  https://pcogiving.zendesk.com/hc/en-us/articles/25191013849371-New-In-Kind-Donations

By adhering to these guidelines, both donors and recipient organizations can ensure that in-kind donations are managed and acknowledged in compliance with IRS standards.