Someone donates a computer, another person offers hours of free professional work, a company gives away building materials. In-kind donations are real and valuable, but rarely recorded with the same rigor as cash donations. Here is how to do this correctly.
Why in-kind donations often get left out of records
There's no obvious bank transaction to remind anyone to record them, so they easily fall out of financial reports, even though they have real value and, in some cases, tax implications for both the church and the donor.
What's worth recording as an in-kind donation
- Physical goods with significant value. Equipment, building materials, furniture, anything the church would otherwise need to buy.
- Donated professional services. Work from a lawyer, accountant, or other professional who would normally charge for the service.
- Use of space or equipment at no cost. A venue lent for free for an event has value equivalent to renting it.
How to value it correctly
Fair market value at the moment of donation, not the original purchase price or an arbitrary estimate, is the generally accepted standard. For used goods, this means current value, not the value when new.
What to do when the value isn't obvious
For professional services, asking the professional themselves for an estimate of what they'd normally charge is the most direct way to reach a reasonable, defensible value.
Why this matters to the donor, not just the church
In many countries, in-kind donations can be tax-deductible for the donor, but only with proper documentation. Issuing an appropriate receipt for this kind of donation matters just as much as for a cash donation.
What this means in practice
Recording in-kind donations with the same rigor as cash donations gives a more complete, honest picture of the community's real generosity. The Ekklesias Finance module lets you record in-kind donations with documented valuation. You can see how the full platform works.
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