A Guide to Best Practices for Non-Monetary Donations

If you’d like to donate to a charity but don’t have cash to spare, you’re in luck. Many non-profit organizations gladly accept non-monetary donations, such as household goods, clothing, vehicles, and volunteer work. If you’re an attorney, nurse, doctor, or other professional, you could even consider donating your time and services to a good cause.

You may not be giving away money, but paying attention to a few best practices for non-monetary donations is still important. Doing so not only ensures you get the best tax advantages and social benefits of giving; it also ensures your goods and/or services will be received in the spirit in which they’re given. Here’s how to donate your goods, property, or time the right way.

Find Charities That Support Your Values

What type of charity would you like to donate to? Maybe you’d prefer to give books to an organization that teaches underprivileged children how to read. Or perhaps you’re interested in donating pet food or volunteer time to a no-kill animal shelter.

Finding a charity you can feel good about donating to is vital. Look around your city, and you’re sure to find plenty of organizations in need. Of course, you’re not limited to local donations.

CharityWatch is an excellent resource for finding highly rated charities worldwide. To make this watchdog’s list, charities must generally:

• Spend at least 75% of their budget on programs
• Spend $25 or less to raise $100 in support
• Meet governance benchmarks
• Not hold excessive assets in reserve
• Receive “open-book” status for disclosure of financial documents

Top-rated charities include:

• Friends of Animals
• Helen Keller International
• CancerCare
• Children’s Defense Fund
• Center for Community Change Action

Ensure Legal Compliance

If you wish to claim tax deductions, ensuring your charity of choice is legally compliant is important. Many so-called “charities” are businesses or even scams, not legitimate non-profit organizations. Here’s how to tell whether your preferred charity is one of the good ones and how to obtain the necessary documents to claim a tax deduction.

Find Out Whether the Fundraiser and the Charity Are Registered

Before making a single donation, you must determine whether the fundraiser or charity is a real non-profit organization. Follow these best practices for non-monetary donations to do so.

Check Government Databases (TEOS Tool)

Many charities say they’re not for profit, but that doesn’t mean you should take them at their word. Quite a few charity scams depend on donors not doing their due diligence.

It’s very easy to look up whether a charity is a legitimate non-profit, and you can do so in seconds. The IRS has a free Tax-Exempt Organization Search Tool that allows donors to:

• Find information about an organization’s tax-exempt status and filings
• Check eligibility to receive tax-deductible charitable contributions

The TEOS tool scans databases such as:

• Determination Letters
• Automatic Revocation of Exemption List
• Pub. 78 Data
• Form 990 Series Returns

To use the tool:

1. Choose the database you’d like to search.
2. Enter the organization’s name or EIN.
3. Choose a date range to narrow your search.

Note that if you find an organization on the Automatic Revocation of Exemption List, the IRS may have reinstated the organization since then. Check Pub. 78 data or review its determination letter to find out.

Research and Read Reviews

Just because a charity is legally compliant doesn’t necessarily make it a good pick. Some charities misuse funds and goods, which means the organization might not use your donation as you intended.

Reading reviews is a smart way to learn whether a charity is worth your time. Charity Navigator has a good list of highly-rated charities; you can’t go wrong by picking any of them.

The BBB Wise Giving Alliance is another fantastic source of reviews. This organization rates charities on factors such as:

• Board oversight
• Conflicts of interest
• Effectiveness policy
• Budget plan
• Detailed expense breakdown
• Donor privacy
• Complaints

The BBB Wise Giving Alliance gives each charity a rating of “Meets Standards,” “Standards Not Met,” or “Did Not Disclose.” The “Did Not Disclose” status means a charity hasn’t responded to a request for information. This doesn’t necessarily mean a charity is bad; take the rating as a sort of “yellow flag” and proceed more cautiously than you might normally.

File Your Tax Forms

Per IRS rules regarding best practices for non-monetary donations, you can only claim a deduction for donations made to non-profit organizations, not individuals. You’ll also need to itemize your deductions on Schedule A (Form 1040).

It’s easy to determine the value of cash donations, but not so much for non-monetary contributions. To take a deduction on a non-cash donation, you’ll have to determine its fair market value. The FMV is the price the item would sell for on the open market. If you’re unsure, the IRS has a detailed guide (Publication 561) that explains how to calculate the FMV.

Let’s go over a few examples:

• Household items, clothing, and books: These items are usually worth far less than what you paid for them. To determine the value, consider how much the item would sell for in a thrift store or consignment shop.
• Antiques and paintings: Items valued at over $20,000 require an appraisal. You should also have a photograph of the item if the IRS asks for one. For art valued at over $50,000, you must request a Statement of Value from the IRS before filing your taxes.
• Vehicles: You can find current prices for vehicles in dealer price guides. Consider what the vehicle would sell for now, not its original retail price.
• Interest in a business: Determining the value of interest in a business can be complicated. You’ll have to consider the business’s net worth, prospective earning power, competitors, and FMV of assets.

The IRS also has a few other requirements. For contributions of $250 or more (both cash and non-cash), you’ll have to obtain a contemporaneous written acknowledgment from the charity indicating the value of the gift and its description. The organization must also disclose whether it provided any service to you in exchange for the gift.

For non-cash gifts of more than $500, you must complete Form 8283, Non-cash Charitable Contributions. For a deduction of more than $500 but less than $5,000, you’ll also need to complete Section A of Form 8283. Deductions of more than $5,000 require you to complete Schedule B and attach an appraisal. For a property deduction of more than $500,000, fill out Section B and attach the property’s qualified appraisal to your return.

Donation Receipts

If you wish to claim a donation on your taxes, you must get a donation receipt from the charity. Some charities automatically give you one, while others require you to request the receipt. A few charities also have an online receipt generator that allows you to fill in the details of your donation yourself.

Once you have the receipt, be sure to keep it in a safe place. You will need to refer to the receipt when filing your taxes.

Don’t throw the receipt away after filing your taxes. If you’re taking an especially large deduction, there’s a chance that the IRS may audit you. If that happens, the IRS agent will likely want to see the receipt.

Types of Non-Monetary Donations

Once you’ve chosen a charity, you must figure out what you want to give. If you’re at a loss, consider some of the types of donations below.

In-Kind Donations

In-kind donations are any donations that don’t consist of giving cash directly to an organization. They fall into three categories:

• Physical goods (tangible gifts)
• Professional services (intangible gifts)
• Payments to third-party creditors on an organization’s behalf

In-kind gifts can be just as helpful as cash, sometimes even more so. Donations to consider include:

• Computers, tablets, and other technology equipment are always in high demand. If you have a few unwanted computers, you could donate them to a school or library. Just ensure the computers aren’t over five years old and format the hard drives to erase sensitive data before donating.
• Your used clothing could make a world of difference to people in need. Organizations like The Salvation Army collect gently used shirts, pants, dresses, and shoes.
• Many food pantries struggle to supply enough goods to everyone who needs help. If you manage a grocery store or tend a vegetable garden, consider giving your excess food to a local pantry. Don’t give opened packages or expired goods, though.
• If you know of a charity that’s fallen on hard times, consider paying some of its debt. You must give money directly to the charity’s creditor, not the charity itself, for this to count as an in-kind donation.

Per best practices for non-monetary donations, you should consider an organization’s goals carefully before making an in-kind donation. If you make a poor gift, it could burden the organization rather than help it. For instance, if a charity helps stray animals, there’s no benefit to donating clothing, diapers, or kitchenware.

If in doubt, ask the organization what they will and won’t accept. Most charities won’t take the following:

• Used mattresses
• Medications (durable medical equipment in good condition is usually okay)
• Opened or expired food items
• Car seats and cribs
• Recalled items
• Broken glassware
• Weapons and ammunition
• Hazardous chemicals
• Stained clothing
• Damaged or stained furniture

Volunteer Time

It’s a fact that many organizations simply don’t have enough hands on deck to accomplish all of their goals. If you know of such an organization, your time is one of the greatest gifts you could give.

Not only will you be helping a worthwhile cause, but you could also pick up a few valuable skills along the way. That experience will shine on your resume or college application.

Not sure where to volunteer your time? Try one of these:

• Schools: Do you have a knack for teaching and working with kids? If so, many schools would love to have you. You could volunteer to tutor children, provide after-school childcare, or help at events.
• Animal shelters: If you’re an animal lover, this is the perfect volunteer opportunity. You’ll feed the animals, clean cages, walk dogs, and socialize with guests who want to adopt a pet.
• Local libraries: Your local library could probably use some help organizing shelves, hosting events, or assisting guests at the front desk.
• Political campaigns: If you have a favorite political candidate, why not try volunteering for their campaign? This role could involve phone canvassing or going door to door to drum up support.
• Parks: Parks can be a wonderful place to relax and spend time with family, but they don’t stay clean and beautiful all by themselves. Local recreational departments depend on volunteers to maintain trails, pick up litter, and run events.
• Food banks: Food pantries never seem to have enough volunteers. If you’d enjoy helping the disadvantaged but have nothing to give, donate your time instead. You may spend your service preparing meals, handing out food, picking up donations, or helping visitors apply for public assistance.

Physical Property Donations

Got an old car that you’d like to get rid of? Given the price of vehicles these days, your donation is sure to be greatly appreciated.

Many charities accept cars, trucks, motorcycles, and RVs. Some will take boats and aircraft as well. Certain charities only accept running vehicles, while others will accept vehicles in any condition, working or not.

A few charities that seek vehicle donations include:

• The Salvation Army
• Ronald McDonald House Charities
• Habitat for Humanity
• Canine Companions for Independence
• American Cancer Society Cars for a Cure

Remember, you must complete Section A of Form 8283 to claim your donation on your taxes. If the car is worth over $5,000, you must include an independent appraisal and complete Section B.

You can also donate homes, offices, and land to certain charities, such as Habitat for Humanity and The Nature Conservancy. Remember to request an appraisal of the property and include it with your tax return.

Pro Bono Services

Are you a doctor, lawyer, accountant, or other professional? Donating your time and services is a fantastic way to use your skills while helping your preferred charity.

Many hospitals and medical centers could use a helping hand from skilled nurses, doctors, surgeons, and lab technicians. Doctors Without Borders is another great cause to consider. This organization sends medical professionals to conflict zones and countries struggling with endemic diseases.

If you’re a lawyer, consider joining a pro bono attorney network in your state. Through these networks, you’ll provide free legal advice to people who can’t afford to hire their own lawyers. You can also choose to represent clients in court if you’d like.

Clearly Define Your Needs

Before donating, consider the goal(s) you’d like to meet with your gift. Do you want to get rid of excess stock or clean out your house before a move? Maybe you’re looking for a way to maximize tax deductions. Some businesses also make charitable donations as a way to boost public perception.

Your goal will guide your choice of charity and what you give to it.

Expand Your Reach

Getting others to join your cause is a great way to expand support for your favorite charity. No one will give, though, if they don’t know that charity exists. Here are a few tips for attracting attention to your preferred non-profit organization.

Donation Page

You can put a donation page on your website if you have one, but if you don’t, donation platforms make creating a custom page a snap. Kickstarter, GoFundMe, Patreon, and Indiegogo are a few popular platforms to try.

To create a compelling donation page:

• Write an interesting title that grabs the attention of readers.
• Create an engaging story that convinces readers to donate. Your story should include details about the organization’s goals and what the organization uses donations for.
• Include plenty of photos and videos. For instance, if you support a charity that helps impoverished people in other countries, you could add a video of volunteers handing out supplies or building homes.
• Set a reasonable fundraising goal. On some donation platforms, you won’t collect any of the donated money if you don’t meet your goal.

Social Media

Social media posts have the chance to go viral, making platforms such as Facebook, X (formerly Twitter), Reddit, and Instagram great places to talk up your favorite cause.

However, you can’t simply ask for donations and expect the money to roll in. First, you must understand your audience. Are they wealthy business people or strapped-for-cash college students? For the former, you could suggest cash donations. For the latter, you might have better luck asking your audience to volunteer their time.

Be specific with your question. Instead of writing, “We need money,” for instance, you could write, “We’re trying to raise $5,000 to buy books for the library.”

Include a progress tracker to motivate donors further. Your tracker could say, “We’ve reached $1,000 of our $5,000 goal.”

Donor Engagement/Recognition and Acknowledgment

Donors like to feel appreciated, so be sure to thank anyone who gives a gift, no matter how small. You could send a thoughtful thank-you email or mention the donor on social media. Many organizations also like to send acknowledgment letters in the mail.

Recognizing donors doesn’t just make them feel good; it also boosts the chances they’ll donate again.

Got Something You’d Like To Donate?

If you’re raring to give after learning these best practices for non-monetary donations, reach out to us here at Easy Donation Pickup! There’s no need to drive around town to find a place to donate when we come straight to you.

Schedule your pickup now. We appreciate any donation, no matter how big or small.