Charitable In-Kind Donations for Nonprofits

Posted on January 1, 2026

CHARITABLE IN-KIND DONATIONS

These are non-cash gifts of goods, services, or expertise given to nonprofits, like donated computers, free legal advice, or volunteer time, allowing organizations to save money and access resources they might not afford, with donors potentially receiving tax deductions for the fair market value of the items or services, though not for their own donated time. These contributions are recorded as revenue by the charity at their fair market value, requiring careful documentation and reporting.

Types of In-Kind Donations:

• Tangible Goods: Food, clothing, office supplies, furniture, vehicles, equipment or medical supplies.
• Professional Services (Pro Bono): Legal, accounting, graphic design, IT support or marketing.
• Volunteer Time & Expertise: Donated labor, coaching or specialized skills.
• Space: Donated use of meeting rooms, event venues or office space.
• Intellectual Property: Donated copyrights, patents or other rights.

For Donors (Individuals & Businesses)

• Tax Deductibility: You can generally deduct the fair market value (what you'd pay for it) of donated goods, but not the value of your own time or services.
• Deductible Expenses: You can deduct out-of-pocket costs (like supplies) used to provide a service to a charity.
• Valuation: Determine the fair market value(FMV) - what it would cost to buy or rent on the open market.
• Documentation: Keep good records, including receipts and details about the item or service.

For Nonprofits

• Recording: Record the donation at its FMV as revenue on financial statements.
• Reporting: Must present nonfinancial assets separately on the Statement of Activities and provide detailed disclosures and notes.
• Acknowledgement: Provide timely gift receipts to donors, detailing the donated item/service (donor assigns value), and stating the organization's tax-exempt status.

Key Benefit

• In-kind gifts allow charities to expand their budgets further by acquiring needed items and expert help without spending cash.