HomeschoolCPA has been getting quite a few questions via e-mail lately…here’s one I thought I’d share with you having to do with rewarding volunteers.
Carol,
Thank you for your web site. It is a great resource for homeschool groups.
I’m on the board of a home education association. We hold an annual conference of about 800 – 1000 and need many volunteers to help us with the event. What are some appropriate ways to thank the volunteers? Can we give them a gift (e.g. mug)? Can we give them free parking? Can we give them a dollar amount off admission for each shift they work? From one of the answers you gave in your FAQ, it appears it is OK to give discounted admission to the conference, but I just want to confirm that.
Can we give more to key volunteers (ones who are responsible for key areas of the conference and will not be able to attend sessions)? Can we give key volunteers a complete set of CDs from the conference, hotel rooms and meals while at the conference? Do we have to report this on the 990 also?
Thanks for your great help.
Dorothy K
Dorothy,
Thank you for your kind words about my website. You ask some excellent questions. As for the mugs, free parking and reduced admission: yes, yes and yes. All these are appropriate ways to thank your hard working volunteers.
As for the CD set, hotel and meals: yes, these are also appropriate ways to thank volunteers. If any of these volunteers are also board members, you should disclose these expenses paid by the organization on their behalf on Form 990 Part V-A Current Officers compensation. I’d include a note to the effect that the volunteer was given lodging and meals at the annual convention. This is not taxable income to the volunteer. Putting the information on the Form 990 is just a way of disclosing to the IRS and anyone reading your 990 that you pay expenses for volunteers. That is a completely legal, legitimate and generous thing to do!
I hope that helps! Best of success in your future efforts!
Carol L. Topp, CPA
Does this contradict inurement? In this case you appear to be rewarding a person as a result of being on the board. Understand, I am in favor of doing this but I am concerned about the IRS.
Carl
Carl, It is always good to be concerned about following the IRS guidelines for 501c3 tax exempt organizations.
In rewarding board members, I am assuming that the rewards are:
1. incidental, reasonable, but not significant,
2. given in appreciation for volunteer services rendered to the organization
3. not expected by the volunteer board member
4. the board member serves out of devotion to the purpose of the organization and not for personal gain
Inurement is difficult to define, but basically means sharing the profits of the organization with specific, private individuals to benefit them. Offering a token reward in appreciation for volunteer services works the other way. The volunteer has offered time and service to a group while not expecting any benefit, but is given a show of appreciation.
Hope that helps!
Carol Topp, CPA