2.23 Complicated In-Kind Donations

Dear Kim:

I have a board member who has offered to let the person who sells the most tickets to our upcoming event use her beach house for the weekend.  She doesn’t rent her house normally, so she wants to know how she can value this gift so that we can write her a receipt for her donation.  Do you know how we should go about this?  To add to the dilemma, she will probably be the winner, and even so she wants a deduction.  

~Have the Cake and Eat It, too.  

Dear Eat It:

For an absolutely accurate opinion on this, you should consult a lawyer with nonprofit experience.  This will cost you money, so I will offer common sense:  1) A person can’t win the prize that she offers, so your board member must excuse herself from the running unless she really doesn’t want other people to use her beach house. 2)  If she insists on being in the running for her own house, I doubt your board members will compete vigorously if they know she is the likely winner, so the incentive of this prize is probably not that great. 3) You can thank her for offering her house, but as it is not a bed and breakfast, your organization cannot name a value of this prize.    It is very clear that she cannot deduct the value of a prize she owns if she wins (what would that even mean?)  The board chair (hoping this woman is not that) needs simply to call her and explain that while the organization is grateful for her generous offer, the organization cannot be in the business of independently valuing something like this and offering a deduction for it.  The board chair should advise her to take this matter up with her accountant (who will probably have a good laugh!) 

Good luck to you! 

~Kim Klein