Software - Gift-in-Kind?

Theresa Dougherty

We just received a gift of Software that the donor assessed the value at $19M. Do you consider gifts of software as a Gift-in-Kind? How should it be entered in R.E. What documentation should be required of the donor to support the gift (GIK) and the reduced annual fee? Any recommendations are greatly appreciated.

Joshua Bekerman bCLO bCRE

As with most gift-in-kind donations the donor can "value" the gift however they want (I donated my "vintage" couch a few months ago and valued it at over $300,000.  What?  It's vintage and one of a kind! ).  If you send a letter or reciept, do not include any dollar amount, only a description of what was donated.  In this case, they probably and technically are not donating the actual software.  More likely they are donating the use of the software (i.e. the licenses).  Same with most software when you "buy" it, you're not buying the software, you're buying a license to use the software.  If you have a few days of spare time read one of those "Terms" statements that pops up when installing software, before you click the Agree button.  


We would enter it as a gift-in-kind with a value of $0, and notes of what was donated.  I don't think the reduced annual fee would be considered a donation, it's just a discount.  They are not actually giving or donating anything to your org.  


I'm not a lawyer or accountant, nor do I play one on TV.  I highly recommend checking with your auditors, lawyers, and/or accountants on this one, especially considering the exteremly high value placed on it by the donor.

Melissa S Graves

This is something that (since not RE specific) I recomment asking the folks at the FUNDSVCS listserv.. Even checking their archives because these things are discussed often. I am leaning toward remembering that they are not gift since you do not OWN the rights to the software just use of the software. But I am no expert - talk to the gift processing experts at FUNDSVCS.

Sunshine Reinken Watson

Theresa Dougherty:

We just received a gift of Software that the donor assessed the value at $19M. Do you consider gifts of software as a Gift-in-Kind? How should it be entered in R.E. What documentation should be required of the donor to support the gift (GIK) and the reduced annual fee? Any recommendations are greatly appreciated.

We would record it as an in-kind gift and require that the donor either fill out a form or provide us with a statement clearly listing the donated items, services, etc. When we thank them we use the language, "Thank you for your donation of the XXXXX, which you valued at $XXXXX."

Jen Claudy

We always did what Sunshine mentioned...partly because two of us came from a museum, where we were prevented by org policy for valuing in-kind gifts because of rules regarding donations to the collections of the museum.


This text was in the receipt box at the bottom of the acknowledgement letter:

Standard fundraising practices do not permit us to provide a donor with valuation of a gift-in-kind; please consult your tax advisor on IRS requirements.  However, we are pleased to recognize you commensurate with a gift of $XXXX, based on the value you reported.