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In Kind Donations

Posted By Melinda Starkweather, Monday, November 2, 2015
Updated: Wednesday, October 28, 2015

In Kind Donations








Does your organization struggle with handling in-kinds donations? Here are some tips from Startkweather Association Services.


In-kind donations come in two forms:

1. Services performed that are worth a value

2. Items that have a value


In QuickBooks, in-kind donations are recorded as GJE or a general journal entry. You should set up accounts to cover:

1. Items that are donated (assets)

2. In-kind income

3. Services and labor donated (if you are donating, this is an expense; if you are receiving, it is an asset)


If this is new for your members, be sure to create a communications plan so they understand what donations are acceptable and which aren’t. You may always want to accept in-kind donations, or you may want to limit them to a certain event or time of year.


If you use YourMembership, creating an in-kind donation fund is easy. In the ecommerce section of YourMembership, click on donations and create a new donation. Call it In-Kind. Create a custom field for the unique donations. You may want to create two: one for services and one for items. If you want to specifically limit the donations, provide a drop-down menu of those items and an explanation that you don’t want anything other than those.


Strict Laws! The IRS has strict laws about how non-profits handle in-kind so be aware of the regulations. The donor is responsible for professionally (if possible) assessing and certifying the fair-market value of in-kind gifts. The IRS never provides tax breaks for time and services donated.


Remember your manners! Acknowledging gifts both privately and publically will encourage more giving. Find a place on your website for your donors, or in your next publication. If a donor provided $5,000 in services, she may not be able to deduct that on her taxes, but she saved you $5,000 from your expense sheet. Be sure to list her with the donors in the $5,000-$10,000 bracket.

In-kind donations are a great way for associations to save money and involve their community. For more information, see Starkweather’s One Minute YM video, or subscribe to our SmartBooks documentation.



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