Accounting for Inkind Member Donations for Squadron Activities/Operation?

[RADIOMAN015]

For the financial wizards on the list.  As an example my squadron has a member who donates the company's mailing machine postage to send out the weekly mail to wing etc.  We have another squadron member who has donated quite a bit of batteries to keep our ISR radios and Lpers running.

So from an accounting standpoing since no money is really being expended by the unit, it is an off the book transactions.   HOWEVER, it is a real cost that most CAP units would incur IF the "in kind" donations had not bee received.

Shouldn't there be a way to bring this on the books as an expense with the wash as being donated in kind services (in lieu of a cash payment)?

I'm sure there's other examples that one can think of and in my opinion would truely show the cost of operation at the unit level and how it is funded. 

I think the American Red Cross actually accounts for all 'in kind" donations this way.  They will show expense and revnue as "in kind" donations.

Comments/Suggestions
RM 

[Eclipse]

Shouldn't there be a way to bring this on the books as an expense with the wash as being donated in kind services (in lieu of a cash payment)?

Why?

This is the kind of question that results in no free postage or batteries, which technically should be accepted by the wing.

The members take a deduction on their taxes (or don't IANATG) and everyone moves on...

[RADIOMAN015]

Shouldn't there be a way to bring this on the books as an expense with the wash as being donated in kind services (in lieu of a cash payment)?

Why?

This is the kind of question that results in no free postage or batteries, which technically should be accepted by the wing.

The members take a deduction on their taxes (or don't IANATG) and everyone moves on...

Well because it is the right thing to do from a budgeting/accounting standpoint.  We really need to know the true cost of running all our programs including the squadron/group/wing/region levels.  I believe the Red Cross is currently doing this, so there's got to be a good reason why this organization does this.
See:  http://www.redcross.org/www-files/Documents/Governance/file_cont8341_lang0_3599.pdf
"Contributions Services & Materials" under revenue section.

Now as far as wing sending a letter and accepting a weekly postage donation from a member, that would be a little over the top.

I think it would be very interesting to see percentage wise how much donation of inkind etc services we get.   

Shouldn't under transparancy are organizational financial statements truely portray the financing/expenses via all sources whether monetary or "in kind" service/material donations?
RM

[NC Hokie]

The members take a deduction on their taxes (or don't IANATG) and everyone moves on...

Isn't it kind of hard to take a deduction for in kind donations (or any charitable giving) if you don't have the receipts to back it up?

[Eclipse]

The members take a deduction on their taxes (or don't IANATG) and everyone moves on...

Isn't it kind of hard to take a deduction for in kind donations (or any charitable giving) if you don't have the receipts to back it up?

Batteries and postage cost real money, therefore there will be receipts (batteries) and logs of use (USPS meter) - simple enough to deduct if you itemize.

[Pylon]

What Eclipse said. Keep receipts of when you buy the stuff.  And you'll never even need them unless you get audited.


There's nobody who needs this "data" that you propose to collect.  Who needs to know that?   Plus, what we don't need in CAP is more accounting burden for the units, more paperwork, and added barriers to make people not want to give us stuff.  I give plenty of things like office supplies, batteries, and whatever to my unit when needed – like most all of us do.  I don't itemize my taxes, don't need the deduction, and I'm not going to spend 15 minutes documenting the pen I bought so CAP can show nobody, on the annual reports we don't produce anymore, how much we didn't spend.

[NC Hokie]

Isn't it kind of hard to take a deduction for in kind donations (or any charitable giving) if you don't have the receipts to back it up?

Batteries and postage cost real money, therefore there will be receipts (batteries) and logs of use (USPS meter) - simple enough to deduct if you itemize.

That just shows that you bought them, not that you donated them to anyone.  I think that I'd want something more than a handful of Wal-Mart receipts if I claimed a bunch of in kind donations and wound up being audited by the IRS.

[Pylon]

Isn't it kind of hard to take a deduction for in kind donations (or any charitable giving) if you don't have the receipts to back it up?

Batteries and postage cost real money, therefore there will be receipts (batteries) and logs of use (USPS meter) - simple enough to deduct if you itemize.

That just shows that you bought them, not that you donated them to anyone.  I think that I'd want something more than a handful of Wal-Mart receipts if I claimed a bunch of in kind donations and wound up being audited by the IRS.

And CAP already has a process for in-kind donations.  Follow that and you'll get your letter for the IRS then.

[Eclipse]

Isn't it kind of hard to take a deduction for in kind donations (or any charitable giving) if you don't have the receipts to back it up?

Batteries and postage cost real money, therefore there will be receipts (batteries) and logs of use (USPS meter) - simple enough to deduct if you itemize.

That just shows that you bought them, not that you donated them to anyone.  I think that I'd want something more than a handful of Wal-Mart receipts if I claimed a bunch of in kind donations and wound up being audited by the IRS.

That's all you'd normally have if the batteries were used for CAP personally.

If the amount is large enough to be of a concern, then you really should have a letter from the Wing CC, or just donate the money in cash and let the unit buy their own batteries.

[JC004]

I see your point.  The issue is Wing Banker and tracking this stuff would add a ton of requirements and time commitment, most likely.  Once you've got to start tracking this stuff, the absolute control of Wing Banker sorta fades.

The ARC and other organizations do this in part because it balances out the percentages (program funds, administrative expenses, fundraising expenses, etc.) out on their budgets.  That matters a lot for grants and all. 

I've been looking at this issue for my organization because I get A LOT of stuff in-kind.  I once spent a solid two weeks making a wish list, listing companies for possible donations, writing requests, and sending them out.  We got THOUSANDS of dollars worth of stuff and we got so much stuff that we are still going through some of the expendable supplies (folders, pens, markers, paper, etc.) over 5 years later (regular equipment like computers, hole punches, staplers, toys, etc., of course, we're still using, even if it was just as parts to build a new machine in the case of the computers).  I've been planning to do this little effort again, so I started looking into how we are accounting for this all in our budget.  It can be a little sticky and hard to track, I've discovered.

[RADIOMAN015]

What Eclipse said. Keep receipts of when you buy the stuff.  And you'll never even need them unless you get audited.

There's nobody who needs this "data" that you propose to collect.  Who needs to know that?   Plus, what we don't need in CAP is more accounting burden for the units, more paperwork, and added barriers to make people not want to give us stuff.  I give plenty of things like office supplies, batteries, and whatever to my unit when needed – like most all of us do.  I don't itemize my taxes, don't need the deduction, and I'm not going to spend 15 minutes documenting the pen I bought so CAP can show nobody, on the annual reports we don't produce anymore, how much we didn't spend.

Really?  When Joe or Jane Commander or "deep pocket" Sam walks out the door to the land of merry retirement and they've been donating a lot of their personal funds for inkind services/supplies to the unit, don't you think (the unit members) we'd like to know what this loss is going to cost the unit  in the future??  Again this IS NOT about someone wanting an IRS deduction (and we've received "in kind" donation of items from individuals that did not want to be identified in the past and weren't interested in any documents).  It is a way to quantify how much "in kind" donations our members' (and others) make to the operation of their respective unit so that we are very much aware of the cost (avoidance due to donation) as well as the potential increased costs if we lose the donator.   In my unit with the donated postage alone, I would think that it saves the unit $150 a year or so  -- (IF the member had not recently mentioned this to me, I would have never known the member was picking up this cost).     

Again I guess we should assume that the Red Cross probably doesn't know what they are doing (even at the local level) to account for this "in kind" donations.   My guess is that in some units it could be greater than 25% of the total annual expense actually "booked".

Would be interesting to see if the CPA at National Headquarters Finance has ever looked at this and WHY we aren't looking at an easy way to account for this (I would think a simple in kind donation log that could include "annoynomous" for the donator could be filled out with the expense category annotated and the log would be closed at the end of the month & than entered into the system as an adjusting journal entry (versus the AP system) .   It may be a lot more money (in kind donations) than what I've even stated.  Perhaps even a survey would be in order to try to get an idea of how large this is.  In fact, I've got to wonder if this failure to account for "inkind" donations could impact the unqualified audit. 

RM

[Eclipse]

Maybe this should be attacked from a different direction.

Why, on earth, is your unit using $150 a year in postage?  what could you possibly be mailing that often?

If my units spent $20 on postage I'd be asking hard questions about the FWA.

If this is important to you, track it in a spreadsheet - it won't do you any good, because you can't depend on the random acts of kindness, nor will NHQ or anyone else replace it when its gone.

You thank people when they are generous and beg when they aren't - welcome to CAP.

[RiverAux]

There are probably not many people on CAPTalk who regularly decry the lack of data necessary to analyze CAP operations more than I do.  But, in this case I just don't see the point. 

Sure, this might be interesting information to have, but would be way more trouble to collect than it would be worth. 

I'd rather see us starting gathering information about the amount of time members spend on CAP activities, which would be even more trouble to collect, but can easily be translated into dollar amounts that can help demonstrate our worth to local, state, and federal officials upon which we depend for funding. 

[heliodoc]

independentsector.org

It will tell the in kind equivalent of doing work at National rates

FIREWISE  fuels reduction projects have been doing in kind tracking for years

What's so hard about downloading a form and filling it out after a real AF or EM assigned mission?

Current "labor rate" equivalent of volunteers ........approx 18.50 to 19 per hour 2009

[NC Hokie]

Why, on earth, is your unit using $150 a year in postage?  what could you possibly be mailing that often?

If my units spent $20 on postage I'd be asking hard questions about the FWA.

FWA =  fraud, waste, and abuse?  For $20.00 in postage costs?  You're kidding, right?

There are 18 cadet families in my unit, and every one of them receives a letter with the upcoming schedule each quarter.  That's thirty bucks a year right there.  We send certified letters (at $3.25 a pop) to cadets that drop out without returning their uniforms in order to have the required documentation that we made an effort to recover those items, and have also been known to mail FOB items back to those who lost them at our facility.  We EASILY spend $50.00 per year on postage, and there's not much that we can do to lower that amount without taking a hit on our upcoming SUI.

[Eclipse]

http://en.wikipedia.org/wiki/Google_calendar

http://en.wikipedia.org/wiki/Email

http://en.wikipedia.org/wiki/2010

[RiverAux]

There are 18 cadet families in my unit, and every one of them receives a letter with the upcoming schedule each quarter.  That's thirty bucks a year right there.  We send certified letters (at $3.25 a pop) to cadets that drop out without returning their uniforms in order to have the required documentation that we made an effort to recover those items, and have also been known to mail FOB items back to those who lost them at our facility.  We EASILY spend $50.00 per year on postage, and there's not much that we can do to lower that amount without taking a hit on our upcoming SUI.

You could send emails to parents instead of letters.  There will be some without it, but but that could cut the costs down some.

[jimmydeanno]

Why, on earth, is your unit using $150 a year in postage?  what could you possibly be mailing that often?

You know, sometimes mailing things gets you the response you're looking for, especially in this day of e-mail.

When I took over as DCC in my last unit, I did a mailing.  It included an encampment flyer, NCSA information, scholarship info, a parent's night invitation and a letter from me explaining that I was now the DCC and if they needed anything, let me know.

Well, with 50 cadet families, that's $22.00 - for that one mailing.  So, perhaps a new squadron commander does the same thing.  With 100 families in our unit, that's $44.00 for that one mailing.

Turns out, mailing something to the parents was super beneficial because it put something tangible in their hands about the information they would need.  We ended up with the highest encampment attendance we'd had in 5 years, a great turnout at our parent's night, great NCSA application submissions and the parents felt comfortable talking with me.

Sometimes mailing things is the way to go to get the message out, sometime's it isn't.  Either way, mailing things cost money and I wouldn't be surprised if a unit spent $200 on postage.

[NC Hokie]

http://en.wikipedia.org/wiki/Email

http://en.wikipedia.org/wiki/2010

It must be nice to live in a world in which every family has reliable access to email and in which wing inspection teams will accept a document that cannot even be verified to have been delivered as proof that an effort has been made to recover uniforms from drop outs.

Too bad I (and others) don't live in that world.

BTW, did you forget to add a "Well, DUH!" to the links you so helpfully provided?

[Eclipse]

^ I think the implied one was enough.

Say what you want about WIWAC, the techno divide, etc., but it is practically impossible to be a successful cadet or senior member
without an email address and some sort of semi-reliable internet access, even if its just from a library.