“The lifeblood of our organization.”
“Our nonprofit’s backbone.”
“The heartbeat of our mission.”
Nonprofits use all of these statements and more to describe their volunteers. There’s no doubt about it – without volunteers, nonprofits couldn’t accomplish the work they do, and they certainly couldn’t make an impact on their community.
Knowing that volunteers are so important, nonprofits often want to express their appreciation to volunteers with tangible tokens of thanks. But, doing so can get tricky. Cash gifts, even in the form of small gift certificates, can be considered taxable income, and so nonprofits are often discouraged from giving them. The For Purpose Law Group and volunteer management expert Tobi Johnson describe the laws behind this, which all nonprofits should examine.
Still, many non-cash token gifts are tax-free, and more importantly, very much appreciated by volunteers. While most volunteers feel rewarded simply by knowing that they are making a difference in their communities, a nonprofit’s added touch of thoughtfulness helps them feel all the more valued.
While nonprofits can and should engage in typical appreciation efforts, the following are examples of tax-free gifts that go the extra mile.
Parking and Transportation Costs
In some cases, pesky parking or public transportation fees can stand in the way of quality volunteers making it to a nonprofit’s office or events. Nonprofits can offset those fees by validating parking, reimbursing volunteers or giving them an allowance. More information regarding the rules about this tax-free fringe benefit can be found on the IRS’s web site.
Volunteer T-Shirts
A simple token of appreciation, which also promotes a sense of teamwork, is an annual volunteer t-shirt. Each year, a staff member or even a skilled volunteer could design a volunteer t-shirt, which volunteers can wear whenever they are on duty. Nonprofits can even use this idea as a team-building project, and ask volunteers to come up with a theme or team slogan for the year. Their decision can help guide the design for the t-shirt.
Occasional Meals
Providing occasional meals or refreshments to volunteers is a tax-free benefit, and it’s one that’s often most appreciated. Offering volunteers food and beverages at volunteer trainings and large events is an effective way to express thanks, as well as encourage participation. In some cases, it might also defray minor costs that volunteers could incur, if they would otherwise have to bring or purchase their own food. Nonprofits can also hold an annual volunteer appreciation picnic, where staff and volunteers gather to share a meal and recognize volunteers’ dedication.
Education or Training
This is an unusual benefit to offer, but in certain circumstances it is a tax-free benefit for some volunteers. A nonprofit can fund volunteers’ education expenses, so long as the courses are directly related to the duties performed at the organization, they help the volunteers improve upon skills needed to perform their duties, and/or they are required by law. Certain limits apply to this tax-free fringe benefit, and nonprofits should consult their legal counsel if they are interested in providing this to volunteers.
Support in Special Circumstances
Over time, dedicated volunteers become part of the social fabric of their nonprofit community. When a volunteer struggles through personal hardship, such as hospitalization or a death in the family, the nonprofit might want to rally together to do something to support the volunteer. While cash would still be a taxable gift, special occasions would allow gifts of flowers, food, or similar low-cost items. These token gifts are signs of appreciation and carry with them the nonprofit’s expression of support.
Nonprofits should always consult their legal counsel when considering giving gifts to volunteers. While the sentiment might be genuine, the action might cause more accounting problems than it’s worth, and in some cases it could remove important legal protections from the volunteer.
When in doubt, remember that personal expressions of gratitude often go much farther than any gift ever could.
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