May 13, 2022
Non-Monetary Giving at Church
We’ve written a few posts about giving. First, there is recording year-end gifts correctly and we also walk you through starting a counting team. Finally, setting a Budget for Every Occassion.
Most organizations are aware of the importance of tithes and offerings. It’s how your nonprofit stays afloat after all. Most organizations are also apprised of how to record these gifts on their balance sheet. And how to give a donor receipt for cash gifts. Hint: “No goods or services were given in exchange for this gift other than intangible religious benefits.”
It seems more and more there are many other ways to give to a charity. With that, recording non-monetary giving can get a bit tricky.
More than Online Giving
With the technology available today, there are also many ways to donate besides the standard cash or check. While online giving has been popular for quite awhile (thanks, computers and home internet) and app giving is also a real thing (thanks, smartphones). Your ministry might also have a kiosk or tablet in the office. If you are interested in learning more, Tithe.ly has an article to help you learn more about the pros and cons surrounding adding a giving kiosk in your lobby.
With “kids these days” your organization might also be tempted to start looking into other avenues, like cryptocurrency. But before you look into that, talk to your MM Accountant, they will have words to share about this topic.
Non-Monetary Giving
Summer may tend to be lower giving times for your church due to traveling schedules, or just a different routine for some. Now may be the perfect opportunity to remind your constituents of other ways they can give. They can give their time. VBS volunteers? They can give their talents. Filling in for any number of ministries while the summer schedule is off. Or they could give their non-monetary donations. Some examples of non-monetary giving might be real estate, stocks, cars, art work, household items, or clothing.
Miller Management recommends having a form letter that the individual can fill out for these gifts. The letter should thank the recipient for their donation and have the date of gift. It should also provide the name and address of your ministry. The recipient writes the description and fair-market value to include with their tax documents. A written acknowledgement must be submitted to the donor if the property is valued at $250 or more.
We also recommend using the following paragraph on the letter: “The IRS does not permit the value of this gift to be listed on this receipt; the value will need to be determined by the donor. All gifts given to (Church/Ministry Name) are made with the understanding that (Church/Ministry Name) has complete discretion and control over their use. Since nothing of value was exchanged for this gift, 100% of the market value of this gift is income, tax deductible as allowed by law.”
Go to the Non-Monetary Contribution Letter template.
Recording Non-Monetary Giving
After you’ve written the letter of acknowledgement for the donor, you may also have to file paperwork with the IRS. Specifically for items valued at more than $5,000, the ministry would need to file Part 4 of Form 8283. While the gift is still an asset, it is recorded as such on the Statement of Financial Position.
After the gift has been consumed, donated, or sold, there are additional steps and IRS forms to fill out. Especially if it occurs within three years of the donation. This is another reason that the donation be recorded in your financials accurately. It may be best to reach out to your MM Accountant to follow best practices for your specific donation. The depreciation or removal of the gift should also be recorded on your Statement of Financial Position.
Know Before You Give
Before we wrap up, we have one last piece of advice for either traditional or non-monetary giving. No matter how you give, it’s good to know both the ministry and your limits. As a donor, or a ministry, it’s important to learn the balance of giving within your means and trusting the holy spirit’s prompting. You will also want to make sure the ministry is legit before your first donation. Usa.gov has a few tips for donors:
- research the charity first (make sure they are a 501c-3)
- use cash or check first, but can donate items
- keep records of your donation and fill out the correct tax forms to get a tax deduction
We hope you learned a little more about non-monetary giving and the ways your constituents can be involved in a variety of ways. Check back soon for more giving related articles.
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