The price an item or service would sell for between a willing buyer and seller in an open market.
Fair market value (FMV) is the estimated price that property or services would change hands for between a willing, informed buyer and a willing, informed seller, with neither under pressure to act. In the nonprofit context, FMV is used to value in-kind donations and the benefits donors receive in a quid pro quo contribution.
Establishing FMV matters for both record-keeping and donor receipts. For example, the deductible portion of a gala ticket is the amount paid minus the fair market value of the meal and entertainment the attendee receives.
Valuing certain non-cash gifts can be complex, and for higher-value donations the IRS may require qualified appraisals. Because the rules are detailed and depend on the asset, organizations and donors should rely on current IRS guidance and qualified appraisers rather than estimates.
See it in Kindly
A non-cash contribution of goods, services, or time given to a nonprofit instead of money.
A payment that is partly a donation and partly a purchase, where the donor receives something of value in return.
A written thank-you and receipt a nonprofit sends a donor to recognize a gift and document it.
A board-approved set of guidelines defining which gifts a nonprofit will and will not accept, and under what terms.
Manage donors, volunteers, members, and events together in one nonprofit platform, for one predictable subscription with no cut taken from donations.
