FundSvcs Community

 View Only

  • 1.  Gift-in-Kind: Building Materials

    Posted 10-10-2025 03:34 PM

    Hello all! Question regarding a potential gift-in-kind. 

    Students in our construction program each semester build storage sheds. We have a local non-profit that is willing to donate the building materials for these students to build the sheds. Their request, though, is that after the sheds are built, that we turn around and donate the sheds back to the non-profit so that they can provide them to families in need. 

    The fact that the non-profit is wanting us to turn back around and give them the sheds that are built using the materials they provide gave me pause and had me wonder - is it possible for us to still count this as an in-kind gift?

    Thanks in advance for any insight!



    ------------------------------
    Tori Thibodeaux
    Director, Gift Compliance & Administration
    University of North Texas
    Victoria.Thibodeaux@unt.edu
    ------------------------------


  • 2.  RE: Gift-in-Kind: Building Materials

    Posted 10-10-2025 03:50 PM
    This is an awkward situation.

    Clearly, the donation of materials to you for an ongoing program is usually recognizable as a gift. However, in this case, the circumstances sound much more like an exchange transaction. More to the point, you are not being given the material unconditionally and irrevocably. The donor is directing you to return the finished product.

    These circumstances, then, suggest the donor has never relinquished control of the asset - a key criterion for charitable donations. See IRS Publication 526.

    So, I vote no on counting the gift. 

    However, I would not refuse it, either. You still need the material for the class. And, as long as those storage sheds were not promised to another organization, there is no reason why you cannot let the students practice with these materials and then give the nonprofit the finished product. You just cannot issue a gift receipt or count the value in your fundraising totals.

    I assume that this program includes a legal agreement that recipients of any of the sheds must sign, acknowledging that the University of North Texas is not responsible for any defects or injuries caused by the finished product. Just something I'd be careful about . . .

    John

    John H. Taylor, Principal
    John H. Taylor Consulting, LLC
    2604 Sevier Street
    Durham, NC     27705

    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987




    Original Message


  • 3.  RE: Gift-in-Kind: Building Materials

    Posted 10-13-2025 03:13 PM

    That's exactly the line of thinking I had, so thank you!

    I'm getting some push back from our development officer asking us to look at it a different way - if any random donor gave us the materials, could we then turn around and donate the completed sheds? I have heard of sticky situations previously where an in-kind gift was sold within the first 3 years of receipt, and know that caused massive issues, so I feel hesitant. I'm struggling to find precise language in the IRS Publications that state how long an organization must keep an in-kind gift.



    ------------------------------
    Tori Thibodeaux
    University of North Texas
    Victoria.Thibodeaux@unt.edu
    ------------------------------

    Original Message


  • 4.  RE: Gift-in-Kind: Building Materials

    Posted 10-13-2025 03:34 PM
    You never have to keep anything for any period of time.

    The IRS does require you to file an 8282 if you sell property reported on an 8283 within 3 years of the date of the gift. But that's only to see if the original donor overstated the value of the donated property. They compare the values on those two forms.

    In this case, you would not be disposing of the original donation. That was material. The sheds are finished products and likely appreciated in value.

    And, yes, someone else could donate the material, and you dispose of the finished product any way you want. But if you are required to donate them to this particular entity, you have the same donor control issue.

    John

    John H. Taylor, Principal
    John H. Taylor Consulting, LLC
    2604 Sevier Street
    Durham, NC     27705

    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987





    Original Message


  • 5.  RE: Gift-in-Kind: Building Materials

    Posted 10-13-2025 03:38 PM

    This is very helpful! I greatly appreciate your insight.



    ------------------------------
    Tori Thibodeaux
    University of North Texas
    Victoria.Thibodeaux@unt.edu
    ------------------------------

    Original Message


Related Content