What US Nonprofits Need to Know About In-Kind Contributions
Original Article by Mission Box Global Network, cited below
Summary by Simply the Basics
In-kind contributions can be central to an organization’s mission such as providing the items needed to support clients that are experiencing homelessness, or that help to run a reduced cost program, but in-kind donations can also help to cultivate new supporters and build upon your growth.
When receiving an in-kind donation, you must record it’s value using the fair value and making note of the date it was provided. Fair value is the amount that you would be paid to sell or transfer the item.
Ways to determine value:
Check the price you would have otherwise paid for the item in the open market. (For example, if you receive 5 boxes of Dove shampoo, you can check the price of that item through platforms like Walgreens or Amazon)
Obtain quotes from competitors to determine the going rate
Use a salary survey to find the average cost of the skill needed for the donated service.
Once decided on a system, keep it consistent!
While there are benefits to accepting in-kind, there can also be some risks. When receiving items that your organization don’t need or are not equipped to handle, you run the risk of over-committing your organization’s time and resources to manage that donation. In order to mitigate this, it is recommended to come up with a Gift Acceptance Policy.
Gift Acceptance Policy (Including but not limited to)
Items you accept and don’t accept
Thresholds to gift acceptance (value)
Whether gifts may be anonymous
Next, establish a process for accepting, documenting, and acknowledging gifts.
Continue reading “What US Nonprofits Need to Know About In-Kind Contributions” to learn ways to effectively manage your in-kind donations using tools like gift agreements, in-kind forms, acknowledgement letters, and more.
P.S Their article includes an informative and quick video summarizing their article!
