In Kind donations to 501(c)3

[Karen Lee]

My client is a 501©3 doing "green" education. They are a "conduit" between architects, interior designers, contractors and suppliers for various building projects (self sustaining home and green homes). These architects etc are donating time and product for "advertising" and being connected to these "green" projects.

How does the 501©3 issue a receipt for a charitable donation (non-cash) and how does the 501©3 report the non-cash "revenue"?

Would it be like a gross profit slip from the reduction of inventory or the increase in labor costs without generating revenue.

I am really spinning on this one. Any resource direction appreciated.

Thanks

Karen

[BulldogTom]

On just the labor side, the donation of labor is not deductible to the donating party (assuming it is an individual), and would be to the extent of the cost of labor paid by the company, but already deductible as wages on the company's books - so there is no real benefit to the donees. I would suggest a certificate of appreciation.

For the 501c organization on the products being received, it would be the FMV of the products, issued as a regular receipt of any kind that the organization has, like an 8 1/2 x 11 sheet of paper. The accounting would be something like a debit to inventory or materials on hand and a credit to some kind of in-kind donations account.

For the donating company, the entry would be a credit to materials or inventory (COGS?) and a debit to contributions, subject to the normal charitable contributions rules.

Hope this helps. Not sure if this is what you were looking for.

[MAMalody]

I might mention a caution here. (1) Generally, noncash contributions are valued by the donor, not by the recipient. (2) If the noncash contribution would exceed $5000 it may be required to be valued by a qualifed appraiser. (This would probably fall under Tom's "subject to the normal charitable contribution rules.")

[Karen Lee]

Thanks, it helps alot to just get these thoughts aligned. I had mentioned some of these to the client without anybody to confirm (or argue).

Really appreciate it.

Karen

[jainen]

>>donating time and product for "advertising" and being connected to these "green" projects<<

Any receipt issued by your client would need to identify advertising and referrals as goods or services received in exchange for the donations.