Contributions of goods and services are welcome and include (but are not limited to) meeting space, consulting and creative services.
In-Kind Gift Policy
The Institute recognizes certain contributed services as revenue and expense if such services require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not donated.
Each year, the Institute for Public Relations (IPR) audit includes this statement: “The Institute recognizes certain contributed services as revenue and expense if such services require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not donated.”
Specialized services that IPR needs to accomplish its mission might include marketing and communications support; design, hosting and maintenance of the IPR website; and professional services such as legal counsel and research. A core test of whether we should recognize such gifts as in-kind contributions is this: If they weren’t donated, would we need to purchase them?
It’s important to know three things about in-kind gifts:
- There is a valuation requirement whereby the giver and the receiver agree on what the service is worth.
- The receiving organization must recognize both revenue and expense simultaneously. There is no bottom-line impact because the expense offsets the revenue. But accounting correctly for in-kind gifts provides a more accurate picture of the resources received and used by the organization.
- A nonprofit organization cannot thrive on in-kind donations alone. Such donations need to be balanced against the actual cash needs of the organization.
While speakers, authors, Trustees, commission members and other volunteers provide great service to IPR and its mission, we do not account for these as in-kind contributions. As sincerely as we appreciate the time, effort and expertise of our volunteers, we would never be able to purchase these services if they were not volunteered. All three of the requirements stated in our audit – specialized skills, provided by individuals possessing those skills, and would need to be purchased if not donated – must apply before we can recognize an in-kind gift in our financial statements.