What counts as in-kind
An in-kind donation is anything of value that is not money: donated goods (a laptop, supplies, an auction item), and sometimes services or space (a lawyer's pro bono hours, a donated venue).
How to acknowledge it
Describe the item, but do not put a dollar value on it. Valuing the gift is the donor's responsibility, not yours. Your acknowledgment should name what was given and the date, and note that no goods or services were provided in return (if that is the case).
Donated services
Here is the part that surprises people: a donor generally cannot deduct the value of their donated time or services. Out-of-pocket costs tied to volunteering (mileage, supplies) may qualify, but the hours themselves do not.
Recording it on your books
For your accounting, donated goods are typically recorded at fair value as both revenue and a matching expense or asset. Donated services are recorded only under specific accounting conditions. An accountant can set the threshold for what you track.
Why bother tracking it
In-kind gifts show the true cost of running your programs and make your impact story fuller, the donated van and the pro bono design work are real support, even if no cash changed hands.