Tracking In-kind Donations

Owned by Trisha Companero (Unlicensed)
May 01, 2014

In-kind donations (a.k.a gifts in kind) refer to the monetary value of donated goods or services. Another organization, business or an individual may provide in-kind contributions.

Examples of in-kind gifts:

  • Goods: such as art supplies, furniture, paper, computers, food, building materials etc
  • Services: meeting or office space, construction or building labor, and administrative/financial support
  • Expertise: bookkeeping and/or accounting services; legal, tax, or business advice; or marketing, search engine optimization, or social media development

Step-by-step guide

Typically, you will setup in-kind revenue and expense accounts that mirror the types of donations your organization receives

  1. Setting up your accounts:
      • One account will be an in-kind revenue for bookkeeping
      • The other is an expense for bookkeeping
      • Some organizations only have an in-kind expense account and in-kind revenue account
      • Other organizations will go more in-depth and separate the actual areas the donation falls under (supplies, equipment, services, etc.)

      **In order to track donations in detail, utilizing multiple accounts such as income and expense accounts is best.

  2. How to track donated items:
    1. You receive a donation of $1,000 worth of supplies. Your journal entry for this would be:
      • Debit supplies in-kind expense account for $1,000
      • Credit Donation in-kind revenue account for $1,000
    2. Your organization is given a piece of jewelry valued at $3,000 to be auctioned at your annual fundraiser. Your journal entry would be:
      • Debit asset $3000
      • Credit contribution revenue $3000

    3. An individual at the above fundraiser purchases your jewelry piece for $5000. Your journal entry would be adjusted for the difference in sale:

      • Debit cash $5000
      • Credit asset $3000
      • Credit contribution revenue $2000
    4. If however, your jewelry only sold for $1000 then your journal adjustment would look like:
      • Debit Cash $1000
      • Debit contribution revenue $2000
      • Credit asset $3000