Good morning, all.
This discussion was of interest to me. I've been meaning to reply but time got away from me. In the responses, I did not see this issue raised of this being inventory donated by the manufacture and how that affects the valuation. My understanding has always been in these instances that the valuation is the manufacturers cost. It's up to them to determine their deductible amount but I am curious what others are recording for fundraising valuation.
Would you give the donor full invoice value credit in your system for fundraising tracking? Or, do you request substantiation of cost to manufacture. Full retail would definitely be easier as determining manufacturers cost is not always easy. I believe IRS documentation (Publication 561) says: "FMV of the item, minus any gain you would have realized if you had sold the item at its FMV on the date of the gift" which seems to me to be just backing into manufacturing cost.
Many thanks,
John Smilde
Director of Gifts and Records Administration
Advancement and Alumni Relations
George Mason University
4400 University Drive, MSN 1A3
Fairfax, VA 22030
703.993.8680
jsmilde@gmu.edu
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Original Message:
Sent: 12/5/2024 3:57:00 PM
From: Amy Phillips
Subject: RE: In Kind Gifts Donated by the Manufacturer
Good afternoon, Mark -
There are plenty of situations in which you might receive in kind goods where the donor(s) have no interest in a tax write-off so - as John noted - it is simplest to let them complete a form if they need one and your organization simply signs in the appropriate boxes
When it comes to valuation of goods as in the scenario you noted, I find it simplest to ask the donor to create an invoice for what they otherwise would have billed for the items and make a notation along the lines of "payment waived" and submit that as supporting documentation. By doing that you are getting a document your Finance colleagues are likely to appreciate even up to having an itemized list of things they might wish to asset-tag.
Good luck and best regards,
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