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Nonprofit Law/Include non-monetary gifts in revenue?


My nonprofit corporation is applying for 501c3 status.  We provide assistance to homeless individuals and families.  We have had people donate items such as furniture, small appliances, and household goods to us that we then gave to clients free of charge who moved into housing.  We also had a person who donated a monthly bus pass that we gave to a client free of charge.  Should the value of these items be included in our revenue?

Thank you for your help!

The term gross receipts or revenue for purposes of Form 1023 Application for Exemption is the same as that to be used in the annual return Form 990-EZ.  The instructions to that form for Part 1, line 1 instruct, "Report the value of noncash contributions at the time of the donation. For example, report the gross value of a donated car as of the time the car was received as a donation."

Line 1 is included in the total to be computed on line 9 which is for "Total Revenue".
 Therefore, the value of noncash contributions are included in "gross receipts" or revenue.

The Instructions for Form 1023 Application for Exemption for Part IX, line 1 have on page 12 middle column "For example, if one of your activities is a food drive, the value of the donated food must be included on this line."

We can see that that line 1 is included in the calculation for line 13 "Total Revenue".

Harvey Mechanic
Attorney at Law

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.

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Harvey Mechanic


DO NOT GIVE ME INFORMATION THAT YOU WANT KEPT CONFIDENTIAL. I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's possible unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "" without the quotes and then add your search terms before hitting enter.


I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.


B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.

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