In-kind contributions are not financial. They include donated time or services that have real monetary value. For example:

• A professional athletic trainer donating a few hours a week to run a health class

• The local print shop donating printing for your auction catalog

• A general contractor coming in on her days off to oversee volunteers hanging plasterboard in a basement remodel

• A mechanic offering to keep the organization's vehicles in good condition

Each of these services has real value. However, since no cash changes hands, the contributions are in-kind.

Accounting for In-Kind Contributions

Your organization can and should attach a monetary value to the contribution and include that amount in your budget on the in-kind line in your income section. Determine the current fair-market value of goods or services and use those figures in your budget. For determining salary amounts, use the current salaries the exact service would cost if you had to contract someone.

Those Contributions May Be Tax Deductible

Although the incentive for most people to make in-kind contributions to a nonprofit is their interest in the mission, once a dollar amount is attached to that contribution for the purposes of the organization's accounting, that same amount may be deductible from the contributor's federal income tax.

Provided you have obtained your federal tax exemption, the contribution has a deductible value.