PROBLEM: A contributor just made a donation of a non-cash item and you would like to indicate the receipt of the item on their Contributor Statement.
SOLUTION: There are several IRS rules and regulations regarding acknowledging the receipt of non-cash contributions.
You can acknowledge the receipt of the item, but the church is not responsible for assigning a value to the gift. This is the responsibility of the contributor. The contributor must follow the IRS rules to assign values to varying types of non-cash contributions.
For example, the value of household items/goods are comparable to tag sale value. Items that are valued over $5,000 require an appraisal. While larger items and automobiles donated to the church are valued differently, depending on whether the church sells, exchanges or disposes of the car (the actual dollar amount received) or if the church keeps the car for use within the church (Blue Book value).
For complete information, go to the IRS web site http://www.irs.gov/charities/charitable/article/0,,id=123202,00.html
You will also throw off your books if you enter the value of a non-cash contribution in your system, as the amount you received will not increase your church income/bank account or other asset account.
From your CMS Contribution System, click Enter Contributions | New Batch | use the batch date that the item was actually received. Set the Counted Totals to zero ($0.00) and enter your initials.
Click the Set Defaults button on the right side of the New Batch display and be sure the Entry Table Display is set to either:
- Display Pledge & YTD Contributions
- Display YTD Contributions
- Neither Pledger or YTD Contributions
DO NOT set the Entry Table Display to Display Fund & Amount Only.
Click OK | OK.
Bring up the contributor who gifted the non-cash item. Go to the fund that you wanted to attribute the gift.
DO NOT ENTER A DOLLAR AMOUNT IN THE AMOUNT COLUMN!
Type an N in the TYPE column or click the up arrow at Type and choose N for Non-Cash and click Select.
Leave the Contributed Amount and Non-Deductible Amount fields blank and enter a Description in the Description field. You can type as much information in this field as you would like! Whatever you type in the Description, will print on the contributor's statement. Click OK.
Print the Edit List and Post the Batch as normal.
When you print the Contributor's Statement (Yearly Detail A, B or C), you will see the acknowledgement of the receipt of the item(s).
NOTE: If you have a contributor that insists the dollar amount appear on their Contributor Statement, and if they can produce tangible proof (receipt) of the value of the item(s) valued at under $250, you can write out a reimbursement check to the contributor and have the contributor sign the check back over to the church. You can now enter the gift as a Cash/Check contribution and NOT as a Non-Cash contribution.