Paying Voulenteers

Replies are closed for this discussion.

Replies to This Discussion

Permalink Reply by James P. Bates on July 4, 2009 at 2:50pm

You can also issue 1099's for any income received over $499 per tax year. Your volunteers are considered independent contractors (for tax reasons only) which allows your service to "pay" them without deducting taxes and FICA.

Permalink Reply by Chance Gearheart on July 5, 2009 at 8:56am

Our department caps it at 500 a year max because of the legal gray area with doing that, since they also provide liability and malpractice insurance, First Responder equipment, and uniform allotments (If you can call T-Shirts uniform allotments. Apparantly the IRS does.)

James P. Bates said:

You can also issue 1099's for any income received over $499 per tax year. Your volunteers are considered independent contractors (for tax reasons only) which allows your service to "pay" them without deducting taxes and FICA.

Permalink Reply by Bud Marsh on July 5, 2009 at 8:25pm

Skip, I don;t know what I did to get under your craw, but you sure have been picking me apart lately. According to the IRS, whom we have been working with lately , if you have any other designation than 501c3 the doners cannot use their donations as a tax deduction. Also for us to maintain 501c3 status we have to prove that we are completely not for profit, which we cannot pay our members eithe per run or by the hour. Now if you know more than the IRS, please prove it.

Skip Kirkwood said:

Not to be harsh, but Bud's statement that if you pay anyone you loose your non-profit or 501(c)(3) tax exempt status is absolutely incorrect. It is completely permissible to pay employees of a non-profit. Lots of charities pay their employees - United Way, YMCA, hospitals, etc.

Also on that note, just because you incorporate (which is done at the state level) as a non-profit does NOT mean that you are tax exempt in the eyes of the IRS. To get a 501(c)(3) tax exemption, or any of the others that are available, you must apply to the IRS for that status. Just being volunteer or accepting contributions does not make it so.

Permalink Reply by dr-exmedic on July 5, 2009 at 10:15pm

Bud Marsh said:

Skip, I don;t know what I did to get under your craw, but you sure have been picking me apart lately. According to the IRS, whom we have been working with lately , if you have any other designation than 501c3 the doners cannot use their donations as a tax deduction. Also for us to maintain 501c3 status we have to prove that we are completely not for profit,

So far, absolutely 100% true.

which we cannot pay our members eithe per run or by the hour.

Non-profit status, according to section 501(c)3 (quoted in full below), has absolutely nothing to do with whether or not your employees are paid. I don't know who's telling you this but they are totally, completely wrong. There are bazillions of 501(c)3 orgs that have full-time employees, including my previous employer, ARC, AHA, etc. (Heck, the head of United Way is paid $530k a year.) If it is a lawyer, you need a new tax lawyer. If it is an IRS official, you need to complain to his/her supervisor. A 501(c)3 exempt coporation may not pay shareholders, but paying employees (or reimbursing volunteers) is perfectly legal.

(3) Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in subsection (h)), and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.

Permalink Reply by Bud Marsh on July 5, 2009 at 10:50pm

maybe that is why we have been having so much trouble with the IRS, and you are right, we need a new lawyer, thanx.

dr-exmedic said:

Bud Marsh said:

Skip, I don;t know what I did to get under your craw, but you sure have been picking me apart lately. According to the IRS, whom we have been working with lately , if you have any other designation than 501c3 the doners cannot use their donations as a tax deduction. Also for us to maintain 501c3 status we have to prove that we are completely not for profit,

So far, absolutely 100% true.

which we cannot pay our members eithe per run or by the hour.

Non-profit status, according to section 501(c)3 (quoted in full below), has absolutely nothing to do with whether or not your employees are paid. I don't know who's telling you this but they are totally, completely wrong. There are bazillions of 501(c)3 orgs that have full-time employees, including my previous employer, ARC, AHA, etc. (Heck, the head of United Way is paid $530k a year.) If it is a lawyer, you need a new tax lawyer. If it is an IRS official, you need to complain to his/her supervisor. A 501(c)3 exempt coporation may not pay shareholders, but paying employees (or reimbursing volunteers) is perfectly legal.

(3) Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in subsection (h)), and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.

Permalink Reply by Jared on July 6, 2009 at 9:29pm

Paying volunteers? Then they are not volunteers, or are they?

While it is important to identify coverage and response problems, i think it is even more important to be honest with yourself (agency, not any one individual). Forgo stop gaps - they only delay the inevitable and don't attack the heart of the issue.

Remember, this is not a hobby. You are providing or attempting to provide a vital 24/7/365 service. Like Skip said, you may honestly want to start by taking stock of what problems you are plagued with and talk with legal experts.

Also, you don't want to mislead the citizens you serve. I have seen too many agencies do this - the day to day operations wouldn't occur without the paid staff but when they bill themselves to the public or the media as a 100% volunteer organization. That always bothered me.

Permalink Reply by Bud Marsh on July 7, 2009 at 9:34pm

I cannot speak for all volunteer orginizations, but ours is completely volunteer.Like you said, if somebody is paid, then you are not volunteer.

Jared said:

Paying volunteers? Then they are not volunteers, or are they?

While it is important to identify coverage and response problems, i think it is even more important to be honest with yourself (agency, not any one individual). Forgo stop gaps - they only delay the inevitable and don't attack the heart of the issue.

Remember, this is not a hobby. You are providing or attempting to provide a vital 24/7/365 service. Like Skip said, you may honestly want to start by taking stock of what problems you are plagued with and talk with legal experts.

Also, you don't want to mislead the citizens you serve. I have seen too many agencies do this - the day to day operations wouldn't occur without the paid staff but when they bill themselves to the public or the media as a 100% volunteer organization. That always bothered me.

Permalink Reply by Matthew Wagner on July 7, 2009 at 11:05pm

Thanks for all the interesting thoughts. I guess i should have not used the term "paid" and "volunteer", in same post. I have all volunteer service also. But it would be nice to give these volunteers some kind of reward for job well done day after day. Instead of calling it pay i could call it a "thanks". Public often not appreciative so we need give each other appreciation. A few dollars a shift is hardly a payment for dealing with the things we often get into.
Bud Marsh said:

I cannot speak for all volunteer orginizations, but ours is completely volunteer.Like you said, if somebody is paid, then you are not volunteer.

Jared said:

Paying volunteers? Then they are not volunteers, or are they?

While it is important to identify coverage and response problems, i think it is even more important to be honest with yourself (agency, not any one individual). Forgo stop gaps - they only delay the inevitable and don't attack the heart of the issue.

Remember, this is not a hobby. You are providing or attempting to provide a vital 24/7/365 service. Like Skip said, you may honestly want to start by taking stock of what problems you are plagued with and talk with legal experts.

Also, you don't want to mislead the citizens you serve. I have seen too many agencies do this - the day to day operations wouldn't occur without the paid staff but when they bill themselves to the public or the media as a 100% volunteer organization. That always bothered me.

Permalink Reply by Joe P. on July 7, 2009 at 11:10pm

Anyone else see the irony in a thread about paying volunteers? I always thought that volunteers wasn't about the money.

Permalink Reply by Tommy Nichols on July 8, 2009 at 11:17am

The volunteer fire department I was with didn't provide any pay due to having paid onduty crew. The way I see it though any little bit will help offset fuel cost and ect. Another thing is to keep track of expenses for yearly tax write off.

• 1
• 2