Guide of Standards and Requirements
Gifts-in-kind are non-cash donations of materials or long-lived assets directly related to the mission of the University or readily convertible to cash to support the University’s mission.
Deductible As Charitable Contributions:
Examples include tangible property such as equipment, software, hardware, product inventory, deep discounts or “bargain sales”, personal collections, items to be used for fundraising auctions, cars, boats, airplanes, and real estate. Intangible or intellectual property includes such things as patents, trademarks, and copyrights.
- Special Rules: Specific IRS rules exist for contributions of vehicles, boats, and airplanes that may limit the donor’s charitable deduction. In addition, the IRS imposes significant additional reporting requirements on the University for these items.
- Donor Reporting Requirements: In addition to inclusion on the donor’s IRS Form 1040 when filing a tax return:
Total non-cash contributions valued at more than $500 require the filing of IRS Form 8283 – Non-Cash Charitable Contributions. The donor may have to complete section A, Section B or both, depending on the type of property donated and the amount claimed as a deduction.
Total non-cash contributions valued at more than $5,000 require the donor to obtain a qualified written appraisal.
- Note: Donors are encouraged to seek professional tax advice for personal income tax questions and assistance.
University Reporting Requirements:
- The University is required to provide an acknowledgement for non-cash gifts that may include a description but not the value of the item(s).
- Gifts valued in excess of $5,000 – the donor may request that the University complete the donee portion of IRS Form 8283 to confirm receipt of the non-cash gift. Only the Gift Processing Department may complete the donee portion of this form on behalf of the University.
- Vehicles boats and airplanes – IRS Form 1098C must be completed by the University and sent to the donor and the IRS. If the University disposes of a gift-in-kind within three years, it must file IRS Form 8282 with the IRS and send a copy of the form to the original donor.
- Note: All of these requirements have specific deadlines and equally stringent consequences if the IRS’s standards are not met. In addition to jeopardizing donors’ charitable tax deductions, failure to comply could lead to University financial penalties up to the value of the donation AND the loss of the University’s status as a charitable institution.
Not Deductible As Charitable Contributions:
The value of a person’s or organization’s time or service, appraisal fees, or partial interest in property is not allowable as a donation.
- Time and Service – The value of a person’s or organization’s volunteer time or service could include such things as consulting, accounting or legal work, and contractor or design services. This does not preclude volunteers from billing the institution for their work, receiving payment, and then making a cash donation to the University.
- Appraisal Fees – Appraisal fees related to establishing the value of the gift-in-kind donation are not allowable as a donation.
- Partial Interest In Property – If the donor maintains partial interest in or ownership of a property, the use of the property cannot be claimed as a donation. Use of a donor’s property for a fundraising event, or free use of office space in a donor-owned building are examples where the donor maintains at least partial interest. If the donor relinquishes interest or ownership in a building or piece of real estate and donates it to the University, it would qualify as a donation.
- Note: Because of the complex nature of this type of donation, it is best to consult with the Gift Processing Department prior to receiving any gift-in-kind contribution. We have access to research materials that can be of assistance to both University staff and donors.
Useful IRS Links:
The information contained here is general in nature and is intended only as a guide. It is not intended to provide legal, tax, or financial advice.
CASE Reporting Standards and Management Guidelines for Educational Fundraising, 4th Ed., 2009.
IRS.gov, Forms and Publications