In-kind gifts can be valuable to a non-profit. Draft policies and procedures to get the most out of these contributions. If your non-profit receives in-kind contributions, here's help understanding their value and knowing how to manage them. For example, your organization could be given transportation or publishing support. An in-kind donation involving time occurs when people give their time free of charge or for payment by a third party on the non-profit’s behalf. An employer might also loan paid employees to help support a non-profit. In-kind contributions can be an important source of non-profit revenue, especially during times of economic recession. Beyond revenue and cost savings, many charities find in-kind contributions an effective way to cultivate supporters and build capacity. When your non-profit receives an in-kind gift, you must record it as revenue using the fair value of the gift and noting the date of receipt.
For example, accepting certain gifts might run counter to your organization's mission and values or you might not be equipped to manage and maintain the value of a gift, such as real estate. A written policy can help manage your donors' expectations and help staff and board members who might be asking for or receiving contributions. Although responsibility to value an in-kind donation falls on the donor, as a courtesy you might acknowledge the fair value of an in-kind donation. You may provide a separate gift acknowledgment after each gift you receive or send an annual summary of contributions by January 31 of the year following the donation. Taking this step will reassure the donor that the gift was received and help solidify your relationship. Evaluating the impact of in-kind contributions can be tricky. As much as possible, track specific ways that in-kind gifts help your organization achieve specific goals. For example, let us say your non-profit is a museum and your goal is to increase your revenue and up the number of annual visitors by 50,000 over the coming five years. If your organization is given $10,000 in in-kind ads and banners, you might attribute an increase in revenue or visitor numbers after the first year to the advertising gift.
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