Valuing project items

Where a qualifying charity receives the money, a bidder may generally deduct only the amount paid above an item's fair market value, and the value has to be disclosed at the time of the transaction. For a donated hotel stay that is simple. For a quilt a member spent ninety hours on, it is not.

This is general information rather than advice for your club. Your Extension educator and, where a county foundation is involved, its own advisers decide how you handle valuation and disclosure.

Value the item, not the effort

The instinct is to value a project item at what the work was worth to the member — the hours, the learning, the pride. That is real and it is not fair market value, which is what the item would sell for between a willing buyer and seller.

In practice that usually means:

• Comparable sales. What a similar handmade quilt, bench or framed photograph sells for locally — a craft fair, a farmers market, an online marketplace
• Materials plus a reasonable margin, where no comparable exists. Documentable and defensible, and usually low
• Not the auction price. A bench selling for several times a comparable is the community supporting the club, which is the point — and the excess is exactly the part the disclosure exists to identify

Write down how you decided

One line per item is enough: the basis used and what it was compared against. Clubs run auctions annually with similar catalogues, and a recorded basis means next year's leader does not re-derive it from nothing.

Perishables and food items

Baked goods, preserves and produce have obvious comparables and are easy to value. The harder question there is whether they may be sold at all under your state's cottage food rules, which is on item ideas.

Experiences and member time

A farm work day, a demonstration or a chore week has a market rate — what a local crew charges. Use that, and note that a bidder paying well above it is supporting the club rather than buying labour cheaply.

Donated goods are the donor's problem

A business donating feed or a soil test may ask the club to state what their donation is worth. Record what they tell you and describe the item accurately. Substantiating a donor's own deduction is between them and their adviser, and a club that starts appraising donated goods has taken on something it does not need.

And the sale is a different question entirely

None of this applies to the livestock sale, where the transaction, the premium over market and any add-ons have their own treatment. See livestock sale versus silent auction.

General information, not legal or tax advice for your club. 4-H operates through Cooperative Extension and a land-grant university, and the applicable policy differs by state and county — your county Extension educator is the first person to ask, and they answer most of this routinely.