Documenting In-Kind Contributions

Documenting in-kind contributions is often challenging for grantees. This promising practice outlined by Walker and Company, LLP highlights the necessary steps for proper documentation. Grantees may find this information useful when recording in-kind contributions.

 

Issue

In-kind contributions (non-cash transactions in the form of goods or services) are not always carefully documented by national service participants. There are many rules and regulations applicable to national service providers, and the varied components of maintaining a successful budget can be cumbersome if not properly understood. National service organizations are subject to audits; when financial reporting is incomplete or delinquent there is the potential for questioned costs.

Action

  • Develop an efficient financial management system from the outset that maintains individual accounts for both federal and grantee share that report expenses consistent with the format of the program budget.
  • Determine the value of in-kind contributions such as, services, material, equipment, building, and land. To decide the appropriate value of goods or services, 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 corporate loaned 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.
  • 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 Corporations for National and Community Service financial reports.
  • Give the donor a receipt signed by the donor that includes the donor's name, date of donation, description of the item or service, and the estimated value. Keep a copy of the donor's receipt for your files.
  • Retain financial records for three years from the date of submission of the final Financial Status Report.
  • 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.
  • Volunteer exception for match: the value of direct community services performed by volunteers does not count as match.

Context

National service providers are required to submit financial reports to both the Corporation for National and Community Service and their host organization.

Outcome

  • National service providers who set up appropriate accounts with their accounting system from the outset are more organized and better equipped to deal with reporting issues.
  • National service providers who understand the guidelines for reporting in-kind contributions are less likely to experience improper reporting consequences, i.e. disfavor from the host organization or questioned costs.
  • Once financial reporting responsibilities are adequately met, organizations can expend greater energy and resources to achieve goals.

Documenting In-Kind Contributions. Walker and Company, LLP. 2006. English.

Last Reviewed: March 2009

Last Updated: September 8, 2015