Original Article by Aldrich, cited below

Summary by Simply the Basics

Many organizations are required by state law and annual audits to report your in-kind donations in your financial statements according to the Generally Accepted Accounting Principles (GAAP).

*Note, if your organization only files a 990 and is not audited, these items are excluded from a 990 but can still be incredibly helpful to track these gifts in order to measure the community’s contribution.

GAAP requires the fair value of donated services to be recognized in the financial statements if the services meet either of the following criteria:

• They create or enhance a nonfinancial asset.

• They require specialized skills, are provided by entities or persons possessing those skills, and would be purchased if they were not donated.

Continue reading “Are You Reporting In-Kind Donations Properly?” to learn what meets the above criteria and what does not, as well as how to find the financial value of your gift for auctions and a “good faith estimate.”

Maffia, A., & LaCour, B. (2022, April 15). In-Kind Donations for Nonprofits: Reporting and Accounting | Aldrich. Aldrich Advisors | Accounting, Benefits, Technology, Wealth. https://aldrichadvisors.com/nonprofit/in-kind-donations/