Glossary
Nonprofit Specific

In‑Kind Contribution

By: Alec Hollingsworth
Updated:  
June 2, 2025

DEFINITION:

An in-kind contribution is a non-cash donation of goods, services, or expertise given to a nonprofit organization.
An in-kind contribution is a non-cash donation made to a nonprofit organization. Instead of giving money, donors provide goods, services, or expertise that have a tangible value. Common in-kind contributions include donated office equipment, professional services (like legal or accounting assistance), event space, or materials needed for a project. Nonprofits must record the fair market value of these contributions for accounting and tax purposes. Proper documentation ensures transparency and compliance with reporting requirements. In-kind contributions help organizations save cash resources and expand their impact by leveraging community support in ways beyond monetary donations.

Key Takeaways

  • Non-cash donations like goods or expertise are in-kind contributions.
  • Must be recorded at fair market value for accounting.
  • Support operations without affecting cash flow.
  • Require documentation for compliance and transparency.

Why It Matters

They help nonprofits meet needs without spending cash and require careful tracking for compliance.

Real World Example

A local bakery donates 200 cupcakes to a nonprofit’s fundraising event. Instead of writing a check, the bakery provides a valued good that the organization would otherwise have to purchase. The nonprofit records the fair market value of the cupcakes as an in-kind contribution in its accounting system, thanks the bakery for its generosity, and includes the donation in its financial statements and annual report. This not only saves event costs but also allows the bakery to support a cause they care about in a meaningful, tangible way.

How Aplos Helps

In Aplos, you can easily track and record in-kind contributions by assigning them to the correct accounts and designating their fair market value. This ensures your nonprofit’s financial reports accurately reflect both monetary and non-monetary support, aiding in compliance and transparency for donors and auditors.
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Frequently Asked Questions

What is an in-kind contribution?

An in-kind contribution is a non-cash donation of goods, services, or expertise to a nonprofit organization.

How should nonprofits value in-kind contributions?

Nonprofits must record in-kind contributions at their fair market value, using documentation to support the valuation.

Are in-kind contributions tax-deductible?

Yes, donors may be eligible for a tax deduction if they provide proper documentation and the nonprofit acknowledges the contribution. Always consult a tax advisor.

How are in-kind contributions tracked in Aplos?

Aplos allows users to record and categorize in-kind contributions, ensuring they appear correctly in financial statements and reports.

Related Terms

Interfund Transfer
Modified Cash Basis
Petty Cash
Sub‑Ledger
Key Performance Indicator (KPI)
Fund

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