Noncash contributions need more documentation than cash gifts, and the records serve two purposes. They support the donor’s tax deduction and they support your nonprofit’s reporting on Form 990. Missing records create problems for both sides, so build the habit of capturing everything at the time of the gift.

Start with donor information. Record the donor’s name, address, and contact details. For larger gifts, you’ll need this for written acknowledgment and potentially for Schedule B of Form 990 if the contribution meets the reporting threshold. Anonymous gifts still need internal records even if the donor isn’t publicly identified.

Document a clear description of what was donated. Not a category like “office equipment” but specifics such as “Dell OptiPlex 7090 desktop computer, used, working condition.” Quantity, condition, and identifying details matter. The IRS expects descriptions detailed enough that someone reviewing the records can understand exactly what changed hands.

Record the date the nonprofit received the item. This date drives the donor’s deduction year and your own reporting period. Keep delivery receipts, signed transfer forms, or photographs with timestamps when practical.

Valuation is where many nonprofits get tripped up. The donor is responsible for determining fair market value, not the organization. Your acknowledgment letter should describe the item but generally should not state a dollar amount. For gifts the donor claims at more than $5,000, the donor typically needs a qualified appraisal and may ask your organization to sign Part IV of Form 8283. Keep a copy of any signed 8283 in your records.

Note any donor restrictions. If a donor specifies the gift must be used for a particular program, kept rather than sold, or held for a set period, document those terms in writing. Restricted contributions affect how you record the gift in your books and how you report net assets on financial statements and the 990.

Be aware of IRS reporting touch points. Schedule M of Form 990 summarizes noncash contributions by type. Schedule B captures major donors. Form 8282 must be filed if you dispose of donated property worth more than $5,000 within three years of receipt, and a copy goes to the donor. These forms pull directly from the records you keep throughout the year, so weak documentation makes accurate reporting nearly impossible.

Treatment of unusual gifts such as vehicles, real estate, cryptocurrency, securities, or services has additional rules that vary by category. Because the consequences of getting it wrong fall on both the nonprofit and the donor, we recommend having a tax professional review your noncash contribution policies and any large or non-routine gifts before finalizing the treatment. Nonprofit accounting involves rules that don’t apply to other organizations, and a quick review often catches issues before they become reporting problems.

If you need help building a documentation process or want a second look at how donated goods are being recorded, GMJ Accounting offers small business accounting, bookkeeping and tax services in Jacksonville, NC and works with nonprofits across the Carolinas on exactly these questions.