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Q&A: Should Noncash Contributions Be Included in Donor Statements?

Qualifying receipts should be issued for noncash donations separately from regular (cash) donor statements.

Elaine L. Sommerville, CPA
Bio
Before the beginning of each school year, our church has a back-to-school backpack drive in which members purchase new packs for needy children. Let’s say a member drops by a local retail store and buys $100-worth of packs for the drive. Should churches include this noncash backpack donation on the donor statement?

My rule is to never add noncash donations to the regular donor statements.

Qualifying receipts should be issued for noncash donations separately from regular (cash) donor statements.

While noncash donation receipts should never include an amount, they must include a complete description of the item(s) given. The courts have ruled that where the description was insufficient, the donation was not allowed.

This additional description requirement does not normally work within the context of the regular cash donation receipts created by typical donor systems. Receipts for noncash donations should include the normal “no goods or services” statement and a full description of the noncash donation, but, again, not include a value. I stick to this rule even if the member submits a receipt for the backpacks to prove what he or she paid for them.

Elaine L. Sommerville is licensed as a certified public accountant by the State of Texas. She has worked in public accounting since 1985.

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