All About In-Kind Donations (with Sample Thank You Letter)

What Are In-Kind Donations?

In-Kind Donations are non-cash donations that come in the form of goods or services. Unlike cash donations where funds are transferred to your group, these items must be recorded based on fair market value.

Some examples of In-Kind Donations include goods (i.e. a computer), property rentals (i.e. a meeting hall), professional services (i.e. a web designer) or materials (i.e. lumber to build a bench).

Determining Fair Market Value

The Fair Market Value of an in-kind donation is how much the item, property or asset would sell for in today’s market. For larger nonprofits, getting this number right might require a professional. But for MoneyMinder customers like parent groups, scouts and booster clubs, it’s typically a little more straightforward.

For example, if someone donated a conference space or meeting room, simply take a look at what is normally charged for that property in an open market. Similarly, when goods are donated, it can be helpful to look online to see what price comparable goods are being sold for.

Managing In-Kind Donations in MoneyMinder

We have a helpful article in our Help Center that details how to create a Bank Account called In-Kind donations, how and why to maintain a $0 balance, and how to record goods or services.

Ensuring IRS Compliance

To ensure IRS compliance, you need to send your donation acknowledgment letters by January 31 of the year following the donation.

What should be included?

1. The name of your donor
2. The full legal name of your organization
3. A declaration of your organization’s tax-exempt status
4. Your organization’s employer identification number
5. The date the gift was received
6. A description of the gift and the amount received
7. Any exchanges your organization provided in receipt of the donation

View our sample treasurer letters here or grab the full set of 40+ treasurer docs over in our Etsy Shop, Treasurer Resources.

This article was originally published in 2021 and update on November 1, 2024.