In-Kind Contributions – Recipient Information Package

These guidelines provide an overview of eligible and non-eligible in-kind contributions suitable for submission to RSIP. Applicants for any RSIP project may fund their projects by drawing on complementary funding from other sources.

On this page

• Objectives
• Context
• Definition of In-Kind Contributions
• Definition of Reimbursable In-Kind Expenditures
• Definition of Non Reimbursable In-Kind Expenditures

Objectives

Recipients will:

1. Gain an understanding of the context for the appropriate use of in-kind contributions
2. Be familiar with the elements of the definition of in-kind contributions
3. Be able to decide if an in-kind contribution should be recognized as eligible
4. Be familiar with the way in which in-kind contributions may impact the calculation of TC’s maximum amount payable

Context

1. Recognizing and valuing stakeholders’ contributions towards a project is an element of program design. It helps to achieve project and program objectives by : 
   • leveraging resources (sometimes pooling resources is the only way to carry out the project)
   • minimizing the cost to the Federal government
   • facilitating stakeholder engagement 
2. The Recipients and possibly other stakeholders’ contributions to a project are recognized and accounted for when the maximum amount payable is calculated as a percentage of total eligible expenditures.
3. The above means valuing in-kind contributions is only relevant when the basis of payments is the reimbursement of eligible expenditures;
4. Valuing in-kind contributions does not apply to grants, and does not apply when the basis of payments is formula based or when payments are made based on the achievement of predetermined milestones.

Definition of in-kind contributions

In-kind contributions are non-cash transactions of goods, services or works: this can include land, buildings, equipment, use of facilities, labour, goods:

• that are eligible expenditures under the Program Terms and Conditions;
• that are provided by interested parties such as recipients, ultimate recipients, departments or other government bodies;
• in support of a federally approved transfer payment project/initiative;
• that is essential to a project’s success and would otherwise be purchased and paid for;
• which shall be measured or appraised at fair market value or cost, whichever is lower;
• and which are approved in advance by Canada (in the contribution agreement).

In-kind contributions should only be recognized when all the above conditions are met, and:

• when fair value can reasonably be estimated and  supported by documentation at the initial assessment or approval stage (or amendment stage);
• when fair value is recorded in the contribution agreement.

Definition of Reimbursable Expenditures

All reimbursable expenditures must be for eligible expenditures under the program. There are two types of reimbursable expenditures:

1. Reimbursable cash expenditures: expenditures paid by the Recipient with a cheque or other form of monetary transaction. Examples include:
   • the rental of an external conference room
   • printing expenditures paid to an external printing shop
   • the Recipient pays a University for the consulting time of an academic
2. Reimbursable in kind expenditures: expenditures estimated at cost using a formula or an estimation of market value, because there is no monetary transaction. The cost should be reasonable, comparable to or less than the market rate, and should not generate a profit for the recipient. Examples include:
   • 10 cents per photocopy made on the Recipient’s photocopier;
   • use of space in the Recipient facility calculated as a percentage of the rent on a pro-rated basis
   • clerical support services provided by the Recipient’s regular staff, calculated using a pre-approved formula such as 10% of the eligible project expenditures
   • use of a vehicle at a rate per kilometre
   • use of a conference room, laboratory, at the rate the Recipient normally rents it out, minus the profit margin
   • use of information contained in a data base might be considered when the Recipient is a not-for-profit, and based on negotiations to establish a reasonable cost
   • the recipient is a University charging the time of its professors for project activities

Definition of Non Reimbursable In-Kind Expenditures

There are a number of instances where in kind contributions may not be reimbursed:

1. the related expenditures are not eligible;
2. the Recipient has not incurred an expenditure, for example, if  goods or services are donated, free of any charge to the Recipient. Donations of goods or assets by third parties or donations of an individual’s time are eligible in-kind expenditures that are not reimbursable because the Recipient received them as donations; reimbursement would then result in a profit to the recipient because it did not incur a cost. However, they are allowable as part of the Recipient’s share of the project expenditures. Examples include:
   • individuals providing services on a volunteer basis (no remuneration): the value of this time should be estimated taking into account the services offered;
   • donation of a piece of equipment  (at the end of the project, the file should contain information as to the disposal of donated assets);
   • donated use of a facility or space by a third party - to hold a project activity;
3. the in-kind contribution is the recipient’s share of the project expenditures.