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Tracking In-Kind Gifts in Salesforce

Let’s say you’re already tracking donations in Salesforce and everything is going smoothly. But now a donor wants to make an in-kind gift to your organization. You’re excited about the gift, but not sure how to record it in Salesforce. How should you track the gift so you can honor the donor’s generosity, acknowledge them appropriately in your annual report, and send them an accurate tax receipt? You’ve got some options, of course! Let’s take a look at how you can set up a good solution in your Salesforce organization.

What does the gift mean to you?

Before you even think about Salesforce, you need to understand how your organization views and uses in-kind gifts. Do you consider in-kind gifts as a component of your development program? Do you want to honor the donor’s gift in your annual report at the same level as a cash donation? Do you need to track the gift item itself, such as donations of computer equipment that your organization refurbishes and donates to clients?

The answers to these questions will guide you in configuring your setup in Salesforce. Make sure you understand how your organization wants to treat in-kind gifts before you start looking for the best solution. If you aren’t clear on this, you probably need to have a conversation with those responsible for development and fundraising at your organization. You may also want to add a section on acknowledging in-kind gifts to your fundraising policies or procedures.

To tax or not to tax

When it comes to in-kind gifts, it’s important to distinguish between a thank-you and a tax receipt. The law prohibits nonprofit organizations from providing a donor with a dollar value of the item donated. It’s the donor’s responsibility to assess the value of their gift and report it to the IRS. Donations of services (volunteer time) are not tax-deductible at all. Your thank-you letter needs to avoid language that could be interpreted as a tax receipt.

With that said, there’s nothing wrong with being generous in how you thank your donors. If someone donated $5,000 worth of goods to your organization, you are free to list them among the other $5,000 donors in your annual report. And if you don’t, they may well feel slighted for not being honored along with cash donors.

In thank-you letters, you can tell the donor what your organization would have spent for the item they donated. Just make sure your language is clear.

Now let’s get into a few scenarios and how you might track them in Salesforce:

In-kind gifts as donations

The most straightforward way to track in-kind gifts is using the opportunity object in Salesforce, just as you would track any other donation. You’ll need a way to distinguish the value of the gift from cash donations. To do this, you can either create a new Type or a new Record Type to be used for in-kind gifts. Either method will allow you to exclude the records from roll-up summary fields, such as “Total gifts this year.”

Using a separate Record Type gives you a few added benefits beyond using Type. With a Record Type, you can create a custom sales process that will allow you to track different Stages from those on your other donation Record Types. You can also set up a Page Layout unique to your in-kind gifts, which will let you choose which fields and sections to show or hide from the page.

To track tax-deductible amounts, you’ll want to create a few extra fields. Here’s how you could use standard and custom fields to track the total amount of the gift, as well as the amount that is tax-deductible:

  • Amount (standard field) – Total dollar value of the gift, whether it is cash or in-kind.
  • Fair market value (custom currency field) – Amount of the gift that is not tax-deductible. For most donation types, this would be set to $0, but for in-kind gifts it would be the full value of the gift.
  • Tax-deductible amount (custom formula field) – Calculates Amount minus Fair market value. For in-kind gifts, the Tax-deductible amount will calculate as zero.

This model gives you the flexibility to understand a donor’s total giving as it impacts your organization (Total Amount), as well as their total giving as the IRS sees it (Tax-deductible amount.) Now you can have the best of both worlds.

Tracking inventory of in-kind gifts

If your organization manages an inventory of in-kind items, such as donations of food, clothing, or equipment that you donate to clients, you may want to track those items in Salesforce, too. To do this, you’d create a custom object to represent items being donated. Through relationships, you can connect the donated item to other objects, such as Contacts, Accounts, and Opportunities. If you’re working with clients who will be receiving the donated items, you could use Cases to track the client’s need, and match their need with an available item.

There’s no one right way to configure Salesforce to track in-kind gifts (or anything else, for that matter!) The best solution depends on your organization and your business needs. Once you get clear on what you need, Salesforce can be configured to take care of the rest.

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