Setting up in-kind donations for a Non-profit

PAR

I am trying to figure out how to keep track of in-kind donations for a non-profit. I have created the relevant income/expense categories but am somewhat stumped as to what accounts to put them under. Should I create a new Cash and Bank account for putting these donations under? Or would it make more sense to do something else? Obviously I don't want to categorize these transactions under our existing bank account as this will screw with our numbers as they aren't monetary based. Please help!

ConnorM

Hey @PAR! That's a really great question! How are you anticipating tracking those in-kind donations? Are you going to put their monetary equivalent as the value of the transaction? Or will each transaction's description just reflect the donated item? I think either way, creating a separate Cash and Bank account should be okay, but I'd be curious to know what your ideal workflow would be here.

bufordr1

Hi @ConnorM, we recently received a gift-in-kind of gift cards which we will use toward a church restaurant outing (whenever restaurants can re-open thanks to CoVid-19). So this is a timely question for us as to how to track these. So what do you think about this approach?

I created an account of type Total Other Current Assets, named Non-cash assets. I made an income transaction entry with an entry describing the asset and it being valued according to the total value of the gift cards. Then I plan to use a journal entry to credit Non-cash assets and debit the expense category (or is it the other way around?) when the gift cards are used.

Does this make sense?

For other non-cash gifts where the value is not easily determined or is subject to change, we could enter the transaction with a value of $0, and then use a journal entry to adjust the value at the time of liquidation. For non-cash assets that we might hold for over a year, it could make sense to separate those to another account of type Other Long-term Assets.

Thank you for your thoughts.

bufordr1

So it looks like I also need an income category for non-cash. And use the journal entry to transfer from Non-cash asset to Checking account and from Non-cash Income to the final account (in this case Special Giving).

That seems to cover everything as I check the P&L and Balance sheets. Would you have further thoughts?

Thank you

ConnorM

Hey @bufordr1! Thanks for reaching out with this great context and insight. Judging on the workflow you'd outlined above as far as your needs, as well as your followup message here, I'm positive you're on the money! Those P&L and Balance sheets will always show if we've done something funky, and considering it sounds like things are balancing, I'm happy to say that I'll give you a big thumbs up here. If things start looking wonky in the future, feel free to tag me back into a post of yours and I'll check it out!