[GNC] How To Record an In-Kind Charitable Donation?

[Adrien Monteleone]

Definitely talk to a local CPA on this.

Materials and services which would otherwise have to be purchased by the ministry are generally recordable by both entities. However, the services are possibly not (at least in the US) deductible. If you regularly produce these materials for other customers without separate material and design fees, then you can invoice the full amount and get a donation receipt accordingly, but if the design fees are usually separate, the ministry may not be allowed to include that in their receipt to you. (this is why you need to talk to a local CPA)

Regardless, you can record the fair market value you would normally sell the materials for, not the cost. Yes, this would be a debit to some Charitable Expense account and a credit to Income/Revenue. (the debit/credit is the same for services rendered)

Note, you can’t ‘donate’ services as a professional that aren’t your profession. For example, an attorney stuffing envelopes for a non-profit mail-out doesn’t record a donation of his consultation time and the non-profit doesn’t record receipt of any professional service. But in your case, if you routinely handle mail-outs as a service to other customers you could maybe donate this to the ministry, though again, can’t likely deduct it or get a receipt for it. (but you should probably still invoice it so you can each record the gift/expense on your books)

Regards,
Adrien

> Eric H. Bowen on Sat Jun 30 15:10:52 EDT 2018
> 
> I performed some design work and provided custom-printed envelopes and
> materials for a local 501c3 charitable ministry. I am not charging them
> money for the items, but I would like to receive credit for their fair
> market value as an in-kind charitable donation. The ministry's treasurer
> said to send him an invoice for the material and he would acknowledge
> its receipt as a donation. Am I able to use Gnucash to track this
> donation and, if so, what is the proper way to record the activity?
> 
> --------Eric H. Bowen