What counts as an in-kind donation?
An in-kind donation is a gift that is not cash. It might be:
- Goods: food, medicines, clothes, computers, building materials.
- Assets: vehicles, generators, furniture.
- Services: legal advice, printing, transport, training.
- Use of property: a free building, or free use of a warehouse.
These gifts have real value, but they also bring risk. A shipment of expired medicine costs you money to store and dispose of. A donated vehicle needs insurance and fuel. Record them carefully from the start.
Should you accept it?
Check before you say yes. Ask:
- Does it match a real need in a project or programme?
- Is it safe, legal and of acceptable quality? For medicines and food, check expiry dates and local import rules.
- What will it cost to transport, store, insure, maintain or dispose of?
- Who is the donor, and are there conflicts or conditions? See our article on conflict of interest.
- Are there conditions on use or disposal that you must keep?
Record the decision and who made it. Declining a poor gift politely is better than taking it and paying to get rid of it.
How do you record it, step by step?
- Log the offer. Donor, items, quantity, conditions and decision.
- Receive the items. Check them as you would a purchase: count, condition, expiry. Write a receiving note. See the goods received note.
- Set a value. Use a fair market value and note the source and date. Have someone other than the person who received the gift approve the value.
- Enter in your records. Consumables go into stock. Durable items above your threshold go into the asset register, with the donor as the funding source.
- Issue a receipt. Thank the donor and list what was received. Do not put a value on it unless your policy and local rules allow.
- Track the end use. Record where the items go: a store, a distribution, a project, a person.
How do you set the value?
| Gift | Possible evidence of value |
|---|---|
| New goods | Supplier price list or recent invoice for the same item |
| Used equipment | Quote for a similar used item, or a simple adjusted price |
| Professional services | The provider’s normal rate for the same work |
| Free use of premises | Local rent for a similar space |
Write down the method and keep the evidence. If you cannot find a reliable value, record the quantity and a note, and ask your auditor how to treat it.
What do donors and auditors expect?
Donors may ask for in-kind gifts in reports, or as match funding. Auditors will look for evidence that the gift existed, that the value was reasonable, and that the items were used for the stated purpose. Accounting treatment and tax rules differ by country, so ask your accountant. Never assume that a rule from one country applies in another.
A short example. A company offers 300 used laptops. The programme team says it needs about 50. The logistics lead accepts 60, declines the rest politely, and checks that the laptops can be wiped and are in working order. On arrival, the receiving officer counts 60, finds four faulty, and records 56 accepted. A quote for similar used laptops sets the value. The 56 go into the asset register with the company as the source, and each issue to a user is signed. The donor receives a thank-you letter listing the quantity received.
How do you record volunteer and professional time? Record the hours, the role and the rate you would normally pay for that work, and have the volunteer or the provider confirm the hours. Keep this separate from goods, because there is nothing to store and nothing to count on a shelf.
What should you tell the donor? Say what you received and how you will use it. Ask your finance lead before stating a value in a letter, because local tax and reporting rules may affect what you can write.
How should you store the evidence? Keep one file per gift: the offer, your acceptance decision, the receiving note, the valuation evidence, the donor receipt and the issue or distribution records. Use the same reference number on every document. When an auditor or donor asks about a gift months later, one file should tell the whole story, from the first offer to the final use of the item.
Where EMPOBase fits
In EMPOBase, Logistics & SCM covers stock by location and an asset register, so donated goods and durable items can be recorded in the same places as purchased ones. Donations appear among the Logistics & SCM features. The valuation, the acceptance decision and the accounting treatment stay with your team and your accountant. The ledger is for projects, grants and restricted funds, and is not statutory accounting. Confirm in a walk-through how your type of gift would be recorded. See the platform overview.