BY: LANA HOCK

An in-kind donation is a non-cash gift made to a nonprofit organization. These contributions can be made in the form of time, services, expertise, and goods.

Because in-kind donations don’t come in the form of physical cash, they can be confusing when it comes to recordkeeping. These donations are recorded by the organization as monetary values, determined by the fair market price they’d otherwise pay for the goods or service received.

What does this mean?

The most common in-kind gift is that of appreciated assets – stocks, real estate, etc.  Rather than gifting cash, this strategy involves the donor making a gift of an in-kind donation of marketable securities, capital assets or life insurance. They do so to avoid paying taxes on the gain by liquidating the asset themselves, and also potentially receiving a tax deduction for the fair market value of the donated asset. FACE receives many gifts of this type and can easily accommodate a donation of stock or other investments “in-kind.”

Other popular in-kind donations that we receive are items for Wag N’ Purr Shop, our online resale boutique, such as gently used designer handbags, fine jewelry, and other accessories. 100% of the profits help pets in need of critical and lifesaving veterinary care. In this case, donors receive a receipt for their in-kind donation and are responsible for properly reporting the items for tax purposes.

The largest in-kind donors to FACE are our veterinary partners, who actively offer their services below their regular pricing to ensure the mission is fulfilled. While the value of donated services is not tax deductible, donors may be able to deduct unreimbursed expenses directly connected to the service provided to a qualified charity.

Advantages: Appreciated property may potentially be deducted at fair market value, potentially allowing the donor to avoid capital gain taxes on the disposition.

Disadvantages: The charity might not always accept assets, and even if they do, an appraisal might be required. Donated assets might need to be used by the charity to fully use the deduction. Any assets subject to debt are treated as a bargain sale.

When to use it: This strategy might be useful to anyone who has low-basis assets. It can be used with nearly all the tools listed here and can be especially easy and beneficial when using appreciated stock or mutual funds.

If you’d like more information, or have assets you wish to discuss the potential of donating, please contact the FACE Development team by calling (858) 450-3223 (option 3), or email donate@face4pets.org

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Lana Hock is a Director/Financial Advisor with the Hock Group at R.W. Baird & Co. and specializes in wealth management and financial planning for individuals and small business owners. Her lifelong love of animals was sparked while growing up on a farm in Nebraska. She has been supporting FACE since 2021 and joined the Board of Directors in 2023. Look for future columns in FACE newsletters covering other popular gifting strategies including in-kind donations, retirement accounts, donor advised funds, private foundations, and charitable trusts.

Donors should consult with their personal tax professionals – this is not considered tax/legal advice.

For information on including FACE in your legacy planning, visit our website, https://face4pets.org/planned-giving/ or contact  our Director of Development, Annamarie Maricle at annamarie@face4pets.org  or 858-450-3223 (option 3).