Non-Cash Contributions for Not-For-Profit Organizations
Accounting standards require not-for-profit organizations to not only record cash contributions as revenue on their financial statements, but also non-cash contributions received by the organization, in order to show users of the financial statements the true cost of operating a not-for-profit entity. Donated goods could include things like, but are not limited to:
• Stocks or other securities
• Food donations
• Personal hygiene product donations
• Vehicles
• Office furniture
• Cryptocurrency
In addition to goods donated to the organization, an organization must also include services provided to the organization for free or at a severely reduced rate.
Examples of donated services could include:
• An electrician completing a repair on a light fixture for your organization, and only charging your organization for parts, but not the cost of labor
• A lawyer providing legal services to your organization pro bono
• A local car dealership leases a car for free to your organization for a special event your organization is doing
• A board member owns a building. They would normally charge $1,000/month for office rental space. This board member allows your organization to rent office space in this building for $200/month.
For the above, the organization would record the difference between what they actually paid for the service and the value of the service provided as in-kind revenue.
Not all services require the organization to record an entry for non-cash contributions. Volunteer labor that is unskilled that the organization would not ordinarily pay for does not need to be recorded as an in-kind contribution. Examples of this include having volunteers haul trash from your basement to a dumpster across the street, or having a volunteer sit at a table and collect ticket stubs for a raffle at an event your organization is holding.
In general, if it’s a service that the organization would be obligated to pay for, it needs to be recorded as in-kind revenue.
© 2025
