Grant-giving organisations often ask for details about in-kind contributions in project budgets. Many NFPs struggle to consider the value they will assign to in-kind and are also unsure how to maintain record keeping for acquittal purposes.
Our team has compiled some handy hints to help you develop the perfect budget for your next grant application.
Typical In-kind contributions
Some common in-kind contributions may include:
- Volunteer specialised labour, such as videographer, IT or legal services
- Free venue hire, such as free office or meeting space
- Free equipment hire, such as marquees or lighting at launch events
- Donated goods or property, such as computers, medical supplies or food
- Free marketing includes newspaper and online advertisements, logo designs or brochure printing.
Where to itemise in-kind contributions
A grant application form usually asks you to itemise the relevant in-kind contributions within your proposed project budget.
Some applications require the completion of a specific In-kind Contributions Worksheet. For example, a community infrastructure project may ask for minimum matched contributions for the funding categories.
When you draw up a budget, list the in-kind contribution values under both income and expenditure.
Record keeping in your organisation
Written records of the contribution, such as a letter of donation or receipts, may not need to be submitted with the application. However, you should ensure that this evidence is available on request, as your organisation is responsible for keeping records of in-kind support committed or received.
For accounting purposes, in-kind contribution records for NFPs should follow Australian Accounting Standards Board (AASB) regulations. AASB 1058 requires NFPs to record the value of gifts in accounts, recognising assets at fair value.
Pertinent records can become a time-saving tool. As part of your organisation’s internal procedures, maintain a list of standard market prices and fees for valuing the types of contributions that often feature in your project events. If you must apply for a grant at short notice, this list will help you formulate a realistic budget more rapidly.
Putting a value on an in-kind contribution
Where the value is not clear, it is the donor’s responsibility to advise the recipient of the donation’s market value.
When developing your grant application for a proposed project, using standard fees for contributions can help you draft the budget.
Standard fees (example: current guides provided by Victorian government) could start with:
- Volunteer general labour – $20 per hour
- Volunteer specialist labour – $45 per hour
- Donated goods should be calculated at the price you would pay for them (market value).
Note that if you want to include local council in-kind contributions to the project, for example, you must ensure the contribution requests – such as requesting council to contribute the venue hire or rubbish removal – are approved before inclusion in your budget.
Deductible Gift Recipient (DGR) Status and GST
In-kind contribution donors will typically provide goods or services to the NFP for either no cost, or for some reduced cost. Note that your organisation must be endorsed by the ATO as a Deductible Gift Recipient (DGR) if donors of in-kind contributions are able to obtain a tax deduction. The ATO website has more information on DGR endorsement for NFPs.
The Arts Law Centre of Australia provides useful information about the GST and In-Kind support. It notes that, “Where both parties to the in-kind support are registered for GST, the supply by one party is generally a creditable acquisition by the other, so the GST is cancelled out.”
Case study:
Your NFP is holding an event which will promote community health and wellbeing, and is applying for a grant to help with costs.
In your proposed budget for the grant application, the in-kind contribution detail could include:
| In-kind Contribution | Income | Expense |
| Posters promoting launch event • Design work – $75 • Printing – $250 | $325 | $325 |
| Temporary shade sails hire | $150 | $150 |
| Portable PA system hire | $25 | $25 |
| General volunteer – staffing for reception desk 6 hours @ $20 per hour | $120 | $120 |
| Skilled volunteer – project management 10 hours @ $40 per hour | $400 | $400 |
| Skilled labour (setting up and operating PA system) 8 hours @ $40 per hour | $320 | $320 |
| Council special event bins and rubbish removal • 5 bins delivered – $100 • 5 bins emptied – $150 (5 x $30) | $250 | $250 |
There may be variables, for example:
• Check the grant funding guidelines first in case they exclude some types of in-kind contributions. Contact the grant funding body directly if you are still unsure of the eligibility of proposed in-kind contributions.
Finalising the grant application budget
After drafting the in-kind contributions in your grant application budget, review all items and ensure you can back up their values with realistic quotes, market values or confirmation letters from donors.
The Next Dimension team can work with you to develop a grant budget that is compliant and considers the most cost-effective way for your project to be shaped, boosting your chances of funding success.
Get in touch with us to find out how.
