Is Your Nonprofit Leaving Money on the Table? Gifts-In-Kind Explained.

 

Accepting gifts-in-kind (GiK) can be a bit complicated for Canadian nonprofits. Simply issuing a CRA-compliant receipt is a clunky process, in part because determining the fair market value (FMV) of an item can require significant time, money and effort, potentially draining staff time and resources. 

Some nonprofits fear being audited if they accept in-kind gifts – something that no charity wants to go through. 

In addition, most nonprofit CRMs simply don’t have the capability to issue a gift-in-kind receipt in an efficient manner, if at all, leaving both the nonprofit and the donor stuck with disorganized records. 

Consequently, many Canadian charities have decided to simply not accept gifts-in-kind, leaving potentially valuable donations on the table.

But imagine saying “yes” to your donor who’d like to give you their incredible collection of tools, or finally accepting those gorgeous hand-quilted blankets from your long-time supporter…

Wouldn’t it be amazing?

If the thing holding your organization back from accepting gifts-in-kind is paperwork, let’s look at a better way to receive, process, and report on gifts-in-kind.

With fundraisingManager from Salesforce, the powerful CRM designed specifically for nonprofits, Canadian nonprofits can now accept and acknowledge in-kind donations. 

Let’s unwrap the complexities of accepting gifts-in-kind in Canada, and offer an easier way to make both donors and nonprofits happy.

Can I donate my services in kind?

Fair Market Value Explained.

How to determine Fair Market Value.

Examples of Gifts-in-Kind

Before we begin, it’s important to note that only goods or items may be donated in-kind, not services. That said, countless items could be donated to Canadian organizations:

• Food
• Clothing 
• Furniture
• Appliances
• Art, collectables & jewelry
• Vehicles
• Electronics
• Land
• Stocks, mutual funds & bonds

The goal with in-kind giving is to have a win-win situation where both the donor and the nonprofit benefit. 

For example, in-kind giving is a great way for food producers to deliver critical supplies to food banks across the country. Non-perishable food donations are efficiently distributed to areas of highest need. And when combined with cash donations, food banks can help provide families with produce, meat and dairy items they otherwise couldn’t afford. 

In the case of Habitat for Humanity, each house requires a ton of building materials, not to mention home furnishings after the home is built. It would be nearly impossible to build Habitat for Humanity homes without the generosity of individual and corporate donors. 

Wood, nails, drywall, tile, appliances – endless items are donated annually to help build homes for Habitat families. The nonprofit gets what it needs to fulfill its mission, and the donor typically deducts the value of these items from their personal or company’s tax liability (consult your accountant for details).

“The processing time for Gifts-in-Kind tax receipting is much faster. Less steps to acknowledge and issue a tax receipt. We love that tax receipts are generated a a protected PDF document.

Vera Nasser

Women in Need Society"

Is There a Better Way to Process Gifts-in-Kind?

From a tax standpoint, gifts-in-kind are treated similarly to cash donations in that their FMV can be deducted from the donor’s tax liability. 

The most important difference is that every gift-in-kind must be assigned an FMV, and each item will require its own CRA-compliant receipt. So instead of creating one receipt with multiple cash donations listed, each item needs to be listed and described individually. 

If the receipting process for gifts-in-kind seems complex, it is. And it’s no wonder some nonprofits simply say “no” to receiving gifts-in-kind from their donors. 

This is where the nonprofit-specific CRM, fundraisingManager from Salesforce becomes a very helpful tool. There’s simply nothing else currently available that even comes close to the power and ease that fundraisingManager offers for processing gifts-in-kind.  

When using fundraisingManager, nonprofit staff can:

1. Quickly acknowledge an in-kind gift using a unique in-kind gift email template
2. Rest assured that all required fields are complete for issuing CRA-compliant receipts
3. Attach a photo of the item or proof of value in the donation record
4. Generate a protected PDF CRA receipt to send via email or in the mail
5. Issue a replacement receipt

Sending donors receipts is one thing, but what about reporting? When it comes to tracking your organizations in-kind gifts, fundraisingManager makes it easy to view, sort and report on in-kind gifts. With a few simple clicks, you’ve got your report. 

• No more maintaining separate databases that don’t talk to each other
• No more hand-configuring reports that don’t add up correctly
• No more duplicating entries 

And perhaps best of all, 

• No more saying NO to donors! 

Due to CRA rules and the detailed nature of the receipts themselves, there isn’t currently a way to batch process in-kind gifts. However, once the gift information is entered into the system, staff can instantly view the details of the gift, including photos and appraisals, within the donor’s record.  

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Check out the entire article here.

If you’d like to learn more about how fundraisingManager from Salesforce can help your organization save time, raise more money, and efficiently manage your day-to-day operations, schedule an intro call with Tasha today.