QUESTION:
We were asked by staff appreciation co-chairs if they could give a $25 gift
card to one person who did a lot for staff appreciation in addition to giving
small gifts to two other people that helped. Can we do this?
ANSWER:
In giving
a gift card to a volunteer, that volunteer ceases to be a volunteer and instead
becomes an employee. The IRS views gift
cards as a form of cash compensation, so we strongly suggest that PTAs do not give gift cards to volunteers.
Paying
volunteers money, or anything of value that can reasonably be construed to be
in exchange for their work, is confusing and potentially dangerous to your
nonprofit corporation and even to the volunteers you're trying to reward. The
basic source of the confusion and the danger is that the law draws sharp
distinctions between employees and volunteers. The precise distinctions vary
among jurisdictions, but the almost universal point of difference is that
employees get paid for their work — volunteers do not. If you pay a volunteer
for his or her work, you've transformed the former volunteer into an employee —
or at least you've created a plausible basis for that person (or perhaps
someone else) to claim he or she is an employee of your nonprofit corporation.
You
may purchase “tokens of appreciation” for volunteers, provided the items are
less than $9.70 in value because anything above that is considered inurement. If
this isn’t in your budget, you would first need approval. Start by checking
your standing rules to see if you can re-allocate funds for these types of
circumstances. Also check if you have a
line item in your budget that could be used for volunteer appreciation. Even if your standing rules state that the
board can re-allocate funds, if there is no line item in the budget available
for this, then you need to get the approval of your general membership.
