Documenting in-kind contributions is a key part of a grantee’s fiscal operations. By accurately documenting in-kind expenditures, your program has a record of its financial "sweat equity" for potential funders. Sweat equity is a contribution to a project in the form of time and effort, as opposed to paying others to perform the same task. Grantees may find the following tips useful when recording non-federal match and in-kind contributions.
- Develop clear policies and procedures for documenting non-federal match.
- Ensure that non-federal match efforts support the goals and objectives of the program and grant.
- Create an efficient financial management system that maintains individual accounts for both federal and grantee shares. It should also report expenses consistent with the format of the program budget.
- Treat the receipt and documentation of non-federal match as you do any other significant or important transaction in the program.
- Document in-kind contributions using the same standards as other expenditures.
- Record in-kind contributions as both revenues and expenses in the General Ledger and all financial reports.
- Provide adequate training to staff members assigned to receive and document non-federal match and in-kind donations.
- Trainings should:
- Provide valuation and documentation techniques
- Be repeated and reinforced as often as necessary
- Include governing bodies and Policy Councils
- Trainings should:
- Make efforts to generate specific donations of time, space, and goods for which the program has identified needs.
- Address these efforts in the annual planning process, and treat non-federal match as any other cost of doing business.
- Develop a list of rates to be used for volunteer services based upon current prevailing rates for that service. Update this list of volunteer rate valuations at least annually.
- Determine the value of in-kind contributions such as services, material, equipment, building, and land. Decide the appropriate value of goods or services.
- Remember to consider what the cost would be if the goods or services were not donated and needed to be purchased.
- Recognize that in-kind donations include:
- Any non-cash donation, including loaned or volunteer executives
- Meetings held in donated spaces
- Government or college interns and/or fellows
- Corporations or municipalities that donate supplies for projects
- Landlords who donate space or discount rent
- Give the donor a signed receipt that includes the donor's name and signature, date of donation, description of the item or service, and the estimated value.
- Keep a copy of the donor's receipt for the official grantee files.
- Retain financial records for three years from the date of submission of the final Financial Status Report.
- Note that goods and services that have been correctly documented and are necessary to accomplish the program's goals and activities may be used as a match and in-kind contributions.
Topic: Fiscal Management
National Centers:Program Management and Fiscal Operations
Last Updated: March 17, 2020