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How do you record a donation by way of bill payment for a not-for-profit?

(Last Updated On: July 10, 2018)

Question – How do you record a donation by way of bill payment?

Example: NP Organization receives a bill. Donor pays the bill directly. There is no repayment to the donor obviously.

Is this recorded similarly as donated rent/space/equipment as an expense? Is it recorded as the intake of restricted donations even though you’re not actually touching the money/donation?


Answer – If the payment is made on the behalf of the charitable organization where the not-for-profit doesn’t take the payment, you would want to credit in-kind donation and debit the expense account.  You will also want to make sure the person who paid the bill gets credit for her/his end of year statement for tax deductions.

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