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Quick tips for working with in-kind gifts of services for nonprofits

Posted August 4, 2021 by Virginia Davidson

Tips on inkind gifts

In-kind gifts are valuable contributions to nonprofits. They may leave you scratching your head when it’s time to send an acknowledgment to the donor, though. In this post, we’ll cover the basics of entering and acknowledging in-kind gifts of services.

Recording in-kind gifts of services

When you enter an in-kind gift of services, make it clear that it’s an in-kind gift rather than a financial gift. If you’re using a donor management system like Little Green Light, you can assign a gift type of “In Kind” and a gift category of “Services”.

It’s important to note that you should not place a value on donated services, so you can enter $0 as the gift amount. You can, however, make a note with the gift record to describe the services that were donated. You might also note the number of hours.

Acknowledging in-kind gifts of services

When it comes to acknowledging in-kind gifts of services, create an acknowledgment template that’s specifically for these gifts.That way, you’re sure to include information that the donor needs, and not include language that’s intended for financial gifts.

Convey your organization’s appreciation of the in-kind contribution. You can also include details of what it’s made possible. For example, if a graphic designer donated their professional services to design an invitation, you could share how many people attended your in-person or virtual event. In your acknowledgment, include a description of the services provided, the date of the service, and/or the hours spent over a period of time. As in your gift record, you won’t place a value on the services.

Donors cannot receive a tax deduction for their value of time or services. However, you can include language that guides the donor to consult their accountant or tax preparer for more information on that topic.

Going forward

Remember these donors after you send your acknowledgment letter. Include them in your newsletter mailings and other communications your organization sends to your donors. Consider sending them a followup thank you letter a few months after their gift as an additional expression of gratitude.

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