Non-profits can raise money by selling things. That money can be used to fund the non-profit either for it’s expenses (including paying employees) or for it’s fund used for it’s beneficiaries. Non-profits can also make a profit according to tax laws and then they have to pay taxes on it. However their own charter may disallow that, and I don’t know what they’d do with that profit except add it to their general fund anyway.
Cracking. Up.
Lots of non-profits run a business to raise funds for their mission- Goodwill’s mission is job training and the thrift stores are raising the funds for that. You can have employees and pay them minimum wage or have volunteers and pay nothing (but you can reimburse travel and you can probably get away with feeding them a meal) but there’s isn’t anything in between. I’m wondering why the money isn’t going toward the mission. If I’m understanding this correctly, the coffee bar is at a alcohol and drug rehab? The coffee bar isn’t the mission, providing treatments to the client is. There are any number of ways to use the money toward the mission but if you are going to pay people, it must be at least minimum wage.
That does seem sort of less than idea. One would think that there should (from a moral perspective) be a middle ground - so you could have someone who was half-employee half-volunteer.
Well, there is an exception that doesn’t seem to apply here. An employee can volunteer for a non-profit employer if it’s truly voluntary, the volunteer work is outside of work hours, and the volunteer work is different from the paid work. You still can’t pay the people manning the coffee bar less than minimum wage- but you can allow the paid counselors to volunteer for free at the coffee bar after work. You can’t pay the counselors for 20 hours and allow them to “volunteer” another 20 hours of counseling.
This what we do in a non-profit organization where I am Treasurer.
Our volunteers give their time & efforts, so we feel the least we can do is reimburse them for their travel expenses, and for meals & lodging when they stay overnight away from home.
It’s not wages, but it does cover their costs, and so make it easier to volunteer. Some of our volunteers can easily afford these costs, and so never submit for reimbursement. Others do, and we pay them. We’re glad to do so; we greatly appreciate the volunteer work they do.
Is there anything you could invest your earnings into that would help your organization in the future? That’s kind of the point of non-profit enterprises- they’re doing what they’re chartered to do, and reinvesting any excess money back into that activity or things that facilitate that activity.
Paying volunteers seems sketchy through that lens if you ask me.
We have a fondation account for the purpose of securing a building someday or if we loose the building we are in to lease another one.
We have a prudent reserve that amounts to 2 months expenses and we have a building account for maintenance and improvements. The building is used for meetings and is the purpose of this particular charity to provide a meeting spot. Each meeting collects thier own money from donations and any funds beyond thier prudent reserve goes to central office.
The members of the club have the say over whether or not we have paid employees. As a voting member I would vote toward some compensation if I could find a way to do it legaly as volunteer only staffing is becomming harder and harder to fill shifts. Many AA clubs have paid employees and many are run strictly on a volunteer basis as we are.
From my experience volunteers should be treated like employees meaning their should be compensation as well as normal management techniques including feedback, work reviews, and further training. Praise good work but if someone is not doing enough, bring attention to it and work to improve them.
Another example, make sure they know they can put this on their resume and you are a reference.
How about giving them uniforms or maybe just shirts or hats? Business cards?
Use some of the profits to improve their working area. Maybe new paint, equipment, tables??? How about that type of padded flooring which makes standing easier.
I also like the idea of a group compensation. Maybe take everyone to the movies?
Thats a good idea, special days for the volunteers movie and a nice dinner would be affordable.
How about my other ideas? Do they have uniforms? Could you improve their work area?
Don’t give the volunteers uniforms. That just turns a voluntary position into a McJob.
Oh another one. If they are females, have free tampons in the bathroom. And good ones to.
Oh I disagree. Often I’ve held a volunteer position and had say a green or red shirt with a logo on it to stand out. Plus its a way for patrons to see who is actually on staff.
Ever worked a golf tournament as a volunteer? You often get a cool golf shirt with the tournament logo on it as part of your compensation.
Can you offer those shifts as paid shifts, only paying a wage for time worked on those shifts?
I don’t know if there is a legal problem for someone to specifically volunteer for some shifts, but then also accept some shifts for pay.
As a general rule, any payment to a volunteer (other than certain payments in kind) over the amount of an expense to the volunteer is taxable income and must be reported. The only major exception that you won’t need an accountant or lawyer’s help with is probably the transportation per diem.
This is what I wanted to check with the accountant on. Possibly have some shifts that were paid and others on a volunteer basis. I did find something on line that suggested some non profit charities were not subject to minimum wage but it was not very clear. Everything has to be very legal with no gray areas. A disgruntled employee or volunteer could easily bankrupt a small non profit corp.
Thinking on it overnight I am leaning more toward more promotion among the members to contribute some time. I would much prefer a compensation program but I can see a lot of places where things could go wrong.
Yes, when we formatted used computer for a charity, we were all IT professionals; it was a one time thing, not a recurring job. The amount we received was reasonable for the job and training. I suppose it would be similar to if a plumber or electrician did a repair job in return for a tax receipt.
I agree, try finding something you can do to make the volunteers’ work life easier, as mentioned - nice uniforms, fix up the break room (hey, a big TV or something?). If for example you ran a drop-in center, something like buy DVD’s for the drop-ins to watch in-house but the volunteers can borrow them first. Free food and drinks. Other perks; you can even have, maybe, computers for them to borrow, provided “borrow” does not become a euphuism for “one person keeps it”.
But I agree, once you are shelling out significant payouts, or tying it to hours, or anything like that - it’s pay.
IANAL, and I don’t run a non-profit, but I do run a business and I’m somewhat familiar with the rules of what you can give to employees and not call it compensation.
If you give an employee a bonus, regardless of whether it’s cash or check or debit card, that is compensation and you have to withhold taxes from it. If you give them a gift (like a clock or a TV) then the fair market value of the gift is compensation.
If you buy your employees lunch every day because you like the idea that they will be close at hand in case there’s an emergency, then the cost of their lunch is considered compensation and you have to withhold taxes from it.
If you have an office party where you buy a bunch of food and put up banners that say Happy 4th of July or something, and you allow them to bring families, that is not compensation BUT it’s also not deductible as a legitimate business expense either. It comes out of company profits.
If you send an employee on a business trip, you can give them a “per diem” to pay for hotel, travel, meals, and incidental expenses, and if they don’t spend it all they can keep the rest without calling it compensation, as long as it doesn’t exceed the maximum amount for that city and the number of days set by the feds.
If you stock the bathroom or employee break room with supplies like sugar packets, free coffee, cookies, napkins, bandaids, paper plates, facial tissues, toilet paper, etc. all that can be deducted as “office supplies” and it’s not considered compensation.
I hope this sheds a little light on the options. Sorry I can’t address the specific situation of unpaid volunteers for a nonprofit.