Recording and Receipting Gifts in Kind

A gift in kind is a noncash donation of goods, materials, or property — supplies, equipment, auction items, professional services rendered without charge, and similar contributions. These gifts carry their own IRS substantiation rules, which differ from the rules for monetary gifts in one important way: the receipt describes what was given rather than stating a dollar amount. This article covers what the receipt needs to contain and how to set up a gift in kind so Humanitru produces that receipt correctly.

For any single noncash contribution valued at $250 or more, the donor is responsible for obtaining a contemporaneous written acknowledgment before claiming a deduction, and the organization must assist by providing a written acknowledgment. That acknowledgment must include:

• The organization's name
• A description of the property donated — not its fair market value
• A statement that no goods or services were provided in exchange, if that was the case (or a description and good-faith estimate of the fair market value of anything provided in exchange)

The organization never states a dollar value for the gift on the receipt. Valuing the donation for tax purposes is the donor's responsibility, not the nonprofit's. This is the single most common error in gift-in-kind receipting, and it's the reason the setup below merges a description rather than an amount.

Enter the gift as an Action, using these three fields to make sure the constituent record and the receipt both hold accurate information:

Action Date

Set the Action Date to the date the gift was actually donated or received — not the date the gift was entered into Humanitru. This keeps giving history, reporting, and acknowledgment timing accurate to when the contribution occurred.

Notes Field (Key Value Pairs)

Use a Key Value Pair in the Notes field to record what was donated, formatted consistently so it merges cleanly and is reportable later, for example:

• Item Donated: 20 folding tables and 40 chairs for the fall gala
• Item Donated: Graphic design services for the spring appeal mailer

A consistent prefix ("Item Donated:") is what makes this field reportable and mergeable — it functions the same way any other Key Value Pair in Notes does.

Merge Field on the Receipt

When building the acknowledgment letter, merge from the Notes field description of what was donated rather than merging a gift amount. This produces a receipt that describes the item or service instead of assigning it a value — matching the IRS requirement above and keeping Humanitru out of the business of valuing the gift.

IRS Publication 1771, Charitable Contributions — Substantiation and Disclosure Requirements (final authority)

AFP Global, "How to Issue Donation Receipts for Different Types of Gifts"