Form 990 Schedule M: What Leaders Need to Know

Most nonprofit leaders can tell you exactly how much cash came in the door last year. But ask about the value of donated furniture, vehicles or stock certificates, and things get fuzzy fast. If your organization received more than $25,000 in noncash contributions during the tax year, the IRS wants a full accounting of those gifts on Schedule M. And if you accepted artwork, historical treasures or qualified conservation contributions, you’re on the hook for Schedule M regardless of the dollar amount. Here’s what you need to know to get it right.

What Triggers a Schedule M Filing

Schedule M is an attachment to Form 990 that reports noncash contributions by property type. According to the IRS instructions for Form 990, organizations must complete it if they answered “Yes” on Form 990, Part IV, line 29 or 30. Line 29 asks whether you received more than $25,000 in noncash contributions. Line 30 asks whether you received art, historical treasures or qualified conservation contributions.

That $25,000 threshold is an aggregate number. It covers the combined fair market value of all noncash contributions your organization received during the year, reported on Form 990, Part VIII, line 1g. Individual gifts below $25,000 can still push you over the line when totaled together. And for certain asset types like artwork or scientific specimens, there is no dollar threshold at all.

Noncash giving has been on the rise for years. According to IRS Statistics of Income data, noncash contributions have grown substantially as a share of total itemized charitable giving, driven in large part by donations of appreciated securities. That trend means more organizations are crossing the Schedule M threshold, and many are encountering its requirements for the first time.

What Schedule M Asks For

The form is organized into two parts. Part I lists 28 categories of property, from artwork and books to vehicles, real estate, food inventory, drugs and medical supplies. For each applicable category, you report four things: whether contributions were received, the number of contributions or items, the dollar amount reported on your Form 990 revenue statement and the valuation method used.

Part II is a supplemental section where you explain specifics. This includes whether you reported the number of contributions or the number of individual items in Part I, any holding period requirements attached to donated assets and whether third parties were used to sell noncash contributions.

One important distinction: Schedule M covers donated property and goods only. It does not cover donations of services or the donated use of facilities or equipment. That confusion comes up regularly among nonprofit organizations, and it creates inconsistencies between Schedule M and other sections of the Form 990 when it’s handled incorrectly.

Where Organizations Run Into Trouble

One of the biggest problems we see is organizations not recording noncash contributions at all. Donated auction items are a prime example. When a supporter donates a vacation package, a piece of jewelry or a signed collectible for your gala auction, that item is a noncash contribution — and it needs to be recorded as such. Many organizations track only the auction proceeds and skip recording the donated item’s fair market value as revenue when it comes in the door. That underreports both revenue and expenses on your financial statements and Form 990. It also means the total value of noncash contributions never hits the books, which can result in an organization crossing the $25,000 threshold without realizing it. When that happens, Schedule M doesn’t get filed at all — and that’s a compliance gap the IRS can flag.

The other frequent problem is inconsistent valuation. When different staff members apply different methods to similar types of donations, or when the approach changes year to year without documentation, it creates discrepancies that auditors will catch. The method reported in Column (d) of Part I should match how the value was actually determined, and it should be applied consistently across similar gift types.

Missing or inadequate appraisals are another issue. IRS regulations require a qualified appraisal for any single noncash contribution (or group of similar items) valued at more than $5,000. For items like art, real estate and closely held stock, this is a firm requirement that affects both the donor’s deduction and your organization’s reporting accuracy. If the appraisal isn’t in your files, that gap will be a problem during an audit.

Reconciliation errors between Schedule M and Form 990, Part VIII, line 1g are also surprisingly common. The amounts you report by property type on Schedule M need to tie back to the noncash contribution total on your revenue statement. When they don’t match, it raises questions with the IRS. Building that reconciliation into your regular month-end close process is the most reliable way to prevent it.

Why Internal Policies Matter

Schedule M, line 31, specifically asks whether your organization has a gift acceptance policy that requires review of nonstandard contributions. If you answer “No,” you’re telling the IRS (and anyone reviewing your public filing) that noncash gifts are accepted without a formal review process. That’s a governance concern.

A solid gift acceptance policy outlines what your organization will and won’t accept, who has authority to approve contributions, when an appraisal is required and how donated property will be valued and recorded. Without one, your team is making ad hoc decisions that may not hold up under scrutiny.

Your accounting processes should also capture noncash contributions when they arrive, not months later when someone is trying to piece together records for the return. Logging each donated item with a description, estimated value, date received and donor information at the point of receipt makes year-end reporting significantly easier. If a contribution exceeds $5,000, the appraisal process should start immediately rather than getting deferred.

It’s also worth noting that if your organization sells a donated item within three years of receiving it, you’re required to file Form 8282 (Donee Information Return) with the IRS and send a copy to the donor. Many organizations overlook this requirement, and failing to file can result in penalties.

Schedule M and Public Perception

Your Form 990, including Schedule M, is publicly available. Donors, grantmakers and watchdog organizations can access it at any time. The way you report noncash contributions sends a signal about your organization’s financial practices and governance. Clean, consistent reporting builds confidence. Gaps or unexplained inconsistencies do the opposite.

For organizations that receive high-value noncash gifts, proactive communication with donors about how their contributions were valued and reported can strengthen those relationships. It also reduces the risk of disputes when the donor’s claimed deduction depends on information your organization provided.

Getting Schedule M Right Starts With the Right Support

Schedule M reporting touches valuation, compliance, donor relations and public accountability all at once. If your nonprofit is receiving noncash contributions and you want to make sure your reporting is accurate and audit-ready, our team works with nonprofit organizations across the country on Form 990 preparation, noncash contribution tracking and financial reporting. Contact a James Moore professional to talk about how we can help.

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