In today’s polarized political climate, corporate social impact professionals face mounting pressure to demonstrate the value of their work not just to society, but also to their businesses. While traditional metrics such as volunteer hours or grantmaking often receive attention, one area that frequently gets overlooked—or worse, inaccurately reported—is the valuation of product donations to nonprofits and community organizations.

For companies that provide in-kind goods, the stakes have never been higher. Accurate product valuation, when done accurately, can add credibility, contribute to audit readiness, increase the bottom line, and help to secure the long-term survival of social impact work in the corporate sector.

Why It Matters Now

Corporate social impact programs exist in an era of heightened scrutiny. Legislators, shareholders, employees, and the public are increasingly skeptical of “corporate social responsibility” claims. In this environment, the ability to clearly show that donated products have been valued responsibly is not just about accounting—it’s about protecting the legitimacy of the entire social impact function.

Failing to accurately calculate and document product donation value creates vulnerabilities. Inflated figures risk accusations of “impact washing.” Underreported values, meanwhile, shortchanges the business by masking the true scale of contributions. Both scenarios undermine trust, and trust is the currency that allows social impact programs to survive budget reviews and political challenges.

Getting to Fair Market Value

So what does accuracy actually mean? At its core, it requires establishing the fair market value (FMV) of the product. FMV is the price that a willing buyer would pay to a willing seller under normal market conditions. Importantly, FMV must exclude sales discounts or promotional pricing that may artificially inflate perceived value.

For example, if a company donates $100,000 worth of medical supplies but those items are typically sold to distributors at a 30% discount, then the donation should be valued at $70,000. This isn’t a technicality—it’s an ethical and legal standard. Using inflated values not only risks noncompliance with accounting standards, but also weakens the ability of nonprofits to credibly report what they’ve received.

Finance as a Critical Ally

This is where collaboration with the finance team becomes essential. Too often, social impact professionals operate in isolation, developing their own methods for valuing in-kind contributions. But in order to “pass muster” with internal audit controls and external financial reviews, the calculation method needs to align with accepted accounting practices.

Engaging finance early has several benefits:

Audit readiness: Finance teams can validate that the calculation method complies with Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS).
Consistency: By creating a repeatable formula, companies avoid year-to-year discrepancies that might draw unwanted attention from auditors or regulators.
Business alignment: Demonstrating that product donations are managed with the same rigor as other financial reporting strengthens the case that social impact is not a “nice-to-have” but a core business practice.

Beyond Compliance: The Business Case

The accurate valuation of product donations isn’t only about risk avoidance—it’s also about strengthening the business case for corporate social impact. When companies can confidently show the real dollar value of their product donations, they:

Elevating internal communications: Aligned reporting allows for easier communication with business leaders.
Support strategic decisions: Knowing the true value of in-kind giving enables more informed trade-offs between cash grants and product donations.
Build trust with nonprofits: Clear reporting signals respect for partners, empowering them to integrate donations into their own reporting with confidence.

At a time when budgets are under pressure, demonstrating quantifiable value is essential to protecting the resources allocated to social impact programs.

Practical Steps for Social Impact Leaders

Based on our experience, here are some concrete steps for ensuring your product valuation practices are sound:

Document your formula. Write down the exact method used to calculate FMV, including data sources, assumptions, and exclusions.
Exclude discounts. Be explicit about removing promotional or sales discounts from valuation. Transparency here prevents inflated reporting.
Engage finance partners. Co-create the valuation process with finance and ensure it aligns with audit standards.
Test the calculation. Pilot the method on a small donation and have finance review it before rolling out more broadly.
Communicate clearly. Share not only the value of donations, but also the methodology used. This builds credibility with stakeholders (customers, business leaders, and board members, investors alike).

Valuation as a Survival Strategy

The future of corporate social impact work depends on credibility. In a climate where every dollar, hour, and donated product is subject to scrutiny, accurate valuation of in-kind contributions is both a compliance necessity and a strategic asset.

By anchoring product donation reporting in fair market value, excluding sales discounts, and partnering with finance to ensure audit readiness, social impact professionals can protect their programs and demonstrate that their work is integral to the business. This is not about accounting technicalities—it is about ensuring that social impact survives and thrives in a world where legitimacy is everything.

How much did we donate?! The Why and How of Product Donation Valuation