In-Kind Donations: Understanding How Nonprofits Account for Non-Cash Contributions

donations can include goods, services, and time that are provided to the organization without a corresponding payment or receipt of cash. In-kind donations are a common way for individuals and businesses to support nonprofit organizations and can be valuable to the nonprofit’s mission.

In-kind donations are recognized as revenue by the nonprofit organization when they meet specific criteria, including:

  1. The donation is made voluntarily and without expectation of payment or other goods or services in return.
  2. The donation can be reliably measured and has a fair market value.
  3. The donation is relevant to the organization’s mission and programs.

Examples of in-kind donations may include:

  1. Donated goods such as food, clothing, or office equipment.
  2. Donated services such as legal, accounting, or marketing services.
  3. Donated time such as volunteer work.

It is important for nonprofit organizations to properly account for in-kind donations in their financial statements. This includes tracking the fair market value of the donation, which can be used for tax purposes and to help demonstrate the value of the organization’s work to stakeholders.

Nonprofit organizations may also have policies in place to manage in-kind donations, including how they are accepted and valued, and how they are used to support the organization’s mission. By properly managing and recognizing in-kind donations, nonprofits can maximize their impact and build stronger relationships with their supporters.

Caroline Grimm

Caroline Grimm is an accounting educator and a small business enthusiast. She holds Masters and Bachelor degrees in Business Administration. She is the author of 13 books and the creator of Accounting How To YouTube channel and blog. For more information visit:

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