Q&A: Donated Goods and Charitable Statements

Q: I occasionally have a church member who donates something the church needs. The member then gives me a receipt for the item purchased and asks me to put it on their giving statement. Is this allowed?

A: No, it cannot go on the member's cash contribution receipt because the member did not contribute cash. The member is allowed a noncash deduction for the fair market value of the item.

Instead of this approach, I suggest that the church reimburse the member in cash for the item. If the member chooses to endorse the check back to the church, then the member has made a cash contribution.

For more help with charitable contributions, including donated goods, check out chapter 8 of Richard Hammar's2013 Church & Clergy Tax Guide.

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Displaying 1–7 of 7 comments

Howard Scully

September 16, 2015  11:00am

@ James A Fulford & Kim Long: issuing an "in-kind gift letter" with a detailed description of the donated item and the date received is appropriate, but including the dollar amount of the gift is not. It is the privilege and responsibility of the donor to determine the value of the gift. Obviously if someone buys something and immediately donates it to the church, the value is likely to be what they paid for it when they bought it, but an in-kind gift letter should never state a value. The donor can generally use the receipt (and keep it and the in-kind gift letter in their records) to document the value of the gift. See IRS publication 1771. Also helpful are publications 526 and 561.

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JAMES A Fulford

September 17, 2014  11:45am

When requested, we write a thank you letter to the donor with a description of the donated items. If they have a receipt, we include the dollar amount of the gift. If not, we don't. The letter is their substantiation for tax purposes.

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Patricia Brown

September 13, 2014  7:56pm

What type of formal letter can be given to a member/nonmember donated items (musical equipment, etc.) to the church. How would you handle the process of receiving goods and services?

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Kim Long

September 10, 2014  2:44pm

If the item they have donated is accompanied by the receipt state the value of the item, can that value be placed on the receipt?

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September 10, 2014  11:55am

Our church is small in number and most members are on fixed incomes, so our budget only covers pastor's salary and housing, utilities, insurance and w/c, and business expenses. Everything such as toilet paper, paper towels, etc. are provided by members and they give me the receipts. I don't combine these amounts with their cash contributions, but I acknowledge them on the end of the year letter and give them a list of dates and amounts and what was donated.

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Bill Beasley

September 22, 2013  12:12am

Is it acceptable to give a non-cash giving receipt for only NEW goods or equipment as long as the church retains the sales receipt for the donated goods with a copy of the non-cash giving receipt on file? Thanks.

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September 18, 2013  9:21am

Thanks for this question and answer as I was wondering the same thing. Several people have given me receipts for items they bought for the church such as a lawnmower, lighting fixtures, etc. Although our bank does not allow me to deposit a check endorsed over to the church. I will have to ask them if it still applies since it is originally a check from the church. They reject checks even made out to our pastor that he endorses over to the church so now we have them make it out to our church instead.

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