I work for a non profit organization where the coffee bar is manned entirely by volunteers. We have been showing a decent profit as of late and our bank account has exceeded the amount that our bi-laws allow us to keep.
We do not make enough profit to pay the volunteers even close to minimum wage without going broke within just a few months. On a typical good month we make under $1,000 dollars profit. I have suggested that we look into ways that we can give bonuses to volunteers without putting ourselves into a minimum wage situation.
Most of us do not need an extra money but some of them any amount would help a lot.
This is in the state of California. Is there a way to give some compensation that would not be regarded as wages?
At a very minimum I would like to see travel expenses compensated for.
We could do that but basicaly we have about 3 volunteers that I would like to see get about $200.00 per month each. They each work about 80 hours per month so it would not be close to a minimum wage.
Shouldn’t the $1000 go towards the non-profit? I would think the function of the coffee bar is to raise revenue for whatever function the non-profit does. Like the way a bake sale raises money for an elementary school. If you’re using the profits to pay the people running the coffee bar, that seems more like a regular coffee bar.
If I was volunteering to run a snack bar for some organization, I would feel weird if they wanted to give me money. I would want the money to go towards the greater cause, not towards my bills.
Plus, it could cause resentment among the other volunteers who aren’t with the coffee bar. I’m sure there are lots of people who also donate their time. They could feel that they would also be entitled to a share of the profits.
None of these issues deal with the question. Most volunteers work less hours and have no need or desire for compensation. A few of them are doing the bulk of the work and have asked for nothing but could really use a little help. The organization could afford about $600.00 a month and if they ever become profitable enough fully intend to put paid staff behind the bar. At present it is not possible.
I assume you could give them “gifts” as a reward, like a gift card to a local store or restaurant. However (a) **filmore **has a valid point, if the position is not paid and the group is non-profit, presumably for some charitable purpose, then likely there are more deserving uses. (b) the danger is setting a precedent. Perhaps some token ($50 or $100 max every few months) but even paying would be dangerous.
Another option would be to see if you can give a charitable receipt (if you are a charity). Not sure how US law works, but many years ago, the large employer I worked for started the process to replace all their old PC’s with up-to-date models. Initially they were going to crush all the old ones - the cost of removing data and reformatting would come close to the resale value. Some of us suggested that instead they donate them to a local charity, and a group of technical employees would volunteer out time to reformat them. The charity took on the work of warehousing and selling them. In return, the charity wrote a tax receipt for our time - in the late 90’s a rate of $50 for technical IT workers was not unreasonable.
In the end, the charity made $30,000 and we got tax receipts for hundreds of dollars against our taxes, no money out of the charity’s pocket. (In fact, to confirm our opinion of upper management, the charity made so much money off the first wave, that for the second wave the PR department asked for half the money back from the computer sales. Cheap bastards.)
I imagined something like a “Volunteer of the Month” award that you could have. That way you recognize the volunteers hard work and add encouragement for others to give more.
You wouldn’t want to give your volunteers the notion that they can rely on being paid. That introduces the possibility that they may become upset if funds grow short and they can no longer be paid. Making it an award allows the possibility of it being suspended without any hurt feelings.
I think paying travel expenses would be fine and not run into any IRS problems. IIRC travel expenses for charity work are deductible as a charitable contribution to the extent they are not covered.
However, md2000’s suggestion will not work in the U.S. You cannot claim a charitable deduction for the time you work for a charity. Essentially you can imagine you are being compensated and then donating your compensation back to the charity which nets out (ignoring SSI, limitations on deductions, etc.).
Not really. Gift cards have cash value, so as far as US tax law is concerned, you might as well write them a check or gift them cash directly. Furthermore, it’s not a gift if there’s an exchange of goods or services, and payroll tax looks at the full fair market value of compensation received, not just cash. This doesn’t entirely prevent nonprofits from giving thank-you gifts to volunteers, but it puts things on pretty thin ice… and that ice is too thin to hold up $2400/year in compensation. ($200 a year would probably be fine, but not per month).
Just seems weird that a non-profit entity wouldn’t use it’s excess cash for the mission under it’s charter, but to pay volunteers. Seems like you should just give the money back to your donors if you can’t find a use for it under your mission.
The problem is keeping enough volunteers. We are allready having to shut down several times a month for lack of volunteers. Keeping the place open for members is the charity as it is for alcohol and drug rehab. Many of us volunteers really don’t want to volunteer and only do it because of a shortage. A very small compensation would be all that is needed to fill shifts we are having trouble filling.
The question is not should we, or why should we, it is how can we and not jeapordize the non profit status. I read a few minutes ago that travel expenses can be given to volunteers with no problems. This would be of some help. As said earlier we are not even close to being able to afford a minimum wage.
Most of the clubs around the area do have paid staff, we can’t afford to have salaried employees yet. It would be nice to be able to give the ones with need at least something. A typical shift will give them an average of $4.00 in tips.
Could you partner with local businesses - stores, gyms, restaurants and so on, who might be willing to give freebies and discounts to your volunteers?
Seems to me that could be win-win-win; the business would get publicity and civic good-karma (and possibly a tax write off?), your organization wouldn’t be spending much-needed funds on volunteers (who, after all, knew they were volunteering when they signed up), and the volunteers would get some sort of compensation.
If it was a one-time or occasional event, you might be okay. But if you are regularly giving significant compensation to people who work in the coffee bar, it’s going to look like a wage to the IRS.
At my work they can give small awards without tax consequences. I think it might be under $20? An award larger than that is considered income and I’ll get taxes taken out based on the value. I’m not sure if there’s a limit on how many small awards they can give out. Could they give me 5 things worth $20 each and avoid taxes? I’m not sure.
So maybe you could give out small gift cards to whoever works the coffee bar that day. Maybe like a $10 gift card or something. But there could still be limits per week or per month that you would need to stay under.
You can be either a paid employee of a non-profit, or a volunteer. Expenses can be compensated. If you give them money otherwise that is payment for services, or they are a benificiary of the non-profit. This isn’t difficult to understand. Pay them or consider them in need of charity if you want to give them money above expenses. If they don’t qualify as a beneficiary of your non-profit then you have to pay them to give them money.
Look up “gifts of nominal value” or “de minimis fringe benefit”. It turns out there may be issues if you give things which are similar to cash (like gift cards). But actual items (a ham of nominal value) may be okay.
I’m not a tax attorney, so I don’t really know what I’m talking about.
It’s only $0.14/mile (compared to $0.56 for business use), and they’d have to itemize. It looks like the charity can reimburse, but only up to that amount.
No cite handy, but psychologically and in some situations a token compensation can be more demoralizing and/or reduce effort, more so than strictly volunteer. I don’t remember if this applies to non-financial compensation (need the right search terms!). A pizza party may be a better bet.
Right, the thought that came into my mind when I read the OP was “You’re doing it wrong”. A non-profit generally isn’t supposed to be making a profit anyway - or if it does, the profit is incidental to its primary goal of providing some social benefit.
When the Red Cross hands out blankets to hurricane survivors, do they worry about making a profit? Does UNICEF have back-office meetings where managers berate low-level staff for not milking enough money out of poor people?
Here is a 2004 transcript of Bin Laden saying he would like to bankrupt us by drawing us in to war, citing the role of the Afghanistan war in the collapse of the Soviet Union. He gives the ROI on 9/11, and gloats that we’ve been really easy to taunt.
None of this stuff is secret mastermind stuff. Bin Laden tried for years to get his little startup going before he refined it enough to make it work in Afghanistan. It’s now a proven model.
Actually, doesn’t the American Red Cross operate the blood donation business and the first aid training business to run a profit, and thereby subsidize the disaster relief? And UNICEF sells those holiday cards, again to support its good works.
