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Maximize Your Volunteer Donations - FGS Wiki

Maximize Your Volunteer Donations


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[NOTE: this page has not yet been formatted.  If you are interested in assisting in the care and maintenance of the FGS Wiki Content, please contact Thomas MacEntee at publicity@fgs.org.]
 
 
 
[[Category:Strategies for Treasurers]]
 
[[Category:Strategies for Treasurers]]
 +
 +
 +
== INTRODUCTION ==
 +
 +
If your society has been designated a nonprofit
 +
[501(c)3] organization by the Internal Revenue
 +
Service (IRS), your members may claim many
 +
of their volunteering expenses as charitable
 +
deductions on their income tax return. Tracking
 +
these expenses is beneficial not only to
 +
members but to your society as well.
 +
 +
While the benefit to the volunteer is obvious–a
 +
reduction in annual income tax–the society
 +
benefit is a bit more obscure. Few non-profit
 +
boards question the need to attach a value to
 +
donations of books, periodicals, computer
 +
equipment, software and other assets. It is
 +
understood that these donations increase the net
 +
worth of the society. Neglecting to enter these
 +
items into the society’s books makes it difficult
 +
to establish the necessary amount of insurance
 +
to carry.
 +
 +
Tracking the cost of donated items such as
 +
postage and supplies, for which a volunteer does
 +
not ask for reimbursement, is also important.
 +
These items are legitimate expenses incurred to
 +
run a society. The donations actually increase
 +
your society’s annual gross income.
 +
 +
If a society neglects to set up a system to
 +
identify and record these donated items, it is
 +
difficult to assess the true cost of running the
 +
society. There is no guarantee that future
 +
volunteers will be able or willing to donate the
 +
costs they incur for the society. Mileage and
 +
travel expenses related to meetings are usually
 +
not reimbursed by a nonprofit society, but it is
 +
worthwhile for the society to track them. In the
 +
event that your society applies for a grant or
 +
loan the amounts donated show the commitment
 +
of your community to the society, with
 +
charitable donations showing as a higher
 +
proportion of the gross income and the
 +
additional expenses reflecting the true activity
 +
of your society.
 +
 +
 +
== What is a Charitable Deduction? ==
 +
 +
According to the IRS, “A charitable contribution is a donation or gift
 +
to, or for the use of, a qualified organization. It
 +
is voluntary and is made without getting, or
 +
expecting to get, anything of equal value.”
 +
 +
What expenditures can your volunteers claim
 +
as tax deductions? A good rule of thumb is that items used
 +
exclusively for the business of the society may
 +
usually be claimed as a donation. Board
 +
members and officers might incur expenses for
 +
items such as notebooks and file boxes
 +
dedicated to society business (if passed on to the
 +
next person performing the job or left in the
 +
society’s library or business office), ink and
 +
paper used for society reports or publications,
 +
postage, and food for society meetings. They
 +
can also deduct expenses for publications
 +
relating to the running of a society, phone
 +
charges for society calls, and possibly Internet
 +
service, if they sign on solely to fulfill their
 +
society duties.
 +
 +
Volunteer teachers and lecturers should claim
 +
the costs of lecture preparation, publications
 +
related to those activities, class materials
 +
provided for classes which are not paid for by
 +
the society, and mileage to the activities.
 +
Teachers and lecturers who receive
 +
honorariums, or collect class fees, should set up
 +
their bookkeeping system as a small business.
 +
The majority of their expenses should be
 +
deducted as business expenses rather than as a
 +
donation to a society.
 +
 +
'''Note:''' If you pay your teachers and lecturers, be
 +
aware of the 1099 reporting requirements.
 +
Currently, any independent contractor who is
 +
paid over $700 should be given a 1099 at the
 +
end of the tax year and a copy should be filed
 +
with the IRS. See IRS Publication 1099
 +
Instructions for more information.
 +
 +
'''Mileage:''' Volunteers can claim actual expenses for the
 +
fuel and oil expended on society business. It can
 +
be tedious to track these expenses. It is much
 +
easier to use the standard mileage deduction.
 +
This deduction is not the same as a business
 +
mileage deduction, which factors in depreciation
 +
and repairs. The standard mileage deduction has
 +
been $ .555 for the last few years, but it is subject
 +
to change. Your volunteers can find the current
 +
donation mileage rate on the IRS Web site or by
 +
calling the IRS. Acceptable mileage would
 +
include driving to board meetings or to put in a
 +
shift at the library, and driving to purchase
 +
supplies, or deliver society publicity materials to
 +
local research facilities. Volunteer teachers,
 +
lecturers, facilitators, and mentors can deduct
 +
mileage to classes, seminars, and even to an
 +
individual’s home if they are visiting the home
 +
in their mentor capacity. Volunteers involved in
 +
projects such as on-site indexing of records or
 +
cemetery reading can claim their mileage.
 +
Mileage to regular society meetings and
 +
seminars may be deductible if the volunteer
 +
attends the function as a volunteer rather than as
 +
a general member who is taking advantage of
 +
the learning activities. A volunteer selling
 +
publications at an Irish Research Seminar, who
 +
has no Irish ancestry, could definitely declare
 +
the cost of mileage to and from the event. The
 +
member who helps at the registration table in
 +
the morning, but attends primarily to hear the
 +
Irish research tips, probably could not claim the
 +
costs.
 +
 +
'''Travel Expenses:''' Travel expenses are subject to the same type of
 +
limitations. Volunteers must ask themselves if
 +
they are personally benefiting more than they
 +
are giving. Would they have made the trip
 +
anyway? Would they have stayed as long? Any
 +
travel expenses that volunteers would not have
 +
incurred if they did not have society
 +
responsibilities can probably be claimed as a
 +
donation. Expenses to consider are airfare,
 +
surface transportation, lodging, meals and
 +
meeting fees. One item to note is that meals and
 +
lodging expenses are not restricted by per diem
 +
rates as they might be in the case of a business deduction. However, these costs must be
 +
reasonable.
 +
 +
If your society covers a large area and board
 +
meetings sometimes require an overnight stay,
 +
expenses (transportation, lodging, meals)
 +
incurred to attend those meetings are a donation
 +
to the society and thus are deductible. Extending the
 +
meeting into a mini-vacation does not change
 +
the ability to claim these expenses. You can still
 +
include transportation to and from the meeting
 +
site, lodging used, without the extension days,
 +
and meals for the meeting days only. The IRS is
 +
likely to accept the fact that you would not
 +
make the trip if you were not required to attend
 +
the meeting.
 +
 +
This same rule does not necessarily hold true
 +
when attending a conference, seminar, or board
 +
meeting in an unofficial capacity. The IRS looks
 +
to see that the majority of your time was spent
 +
on society business, rather than for personal
 +
gain. If you must attend a meeting in
 +
conjunction with the conference, you should be
 +
able to declare expenses as listed above as a
 +
donation. However, additional conference days
 +
are personal expenses unless you can support
 +
the fact that attendance throughout the
 +
conference was necessary for society business.
 +
Registration for the conference itself is a
 +
donation if attending the meeting is required.
 +
If you spend more than half of each day
 +
manning a booth for your society you are
 +
probably entitled to deduct the cost of lodging
 +
and meals for those days. Conference fees,
 +
themselves, would probably not be deductible in
 +
this case unless you are required to register for
 +
the conference to sit in the booth.
 +
 +
Volunteer teachers and lecturers, who attend
 +
sessions in an effort to enhance the classes and
 +
seminars they present, should be able to declare
 +
the entire cost of the conference or seminar as
 +
an educational expense donation.
 +
 +
One exception to this rule is that a society may
 +
designate a delegate to a conference. This
 +
person is entitled to deduct the cost of the
 +
conference even if their personal benefit is as
 +
great or greater than that of the society. This
 +
delegate must, however, act in that capacity in
 +
order to justify the donation deduction. If a
 +
society designates a delegate and that delegate
 +
does not attend the delegate events and classes,
 +
they do not act in their capacity as a delegate
 +
and the costs of the conference should not be
 +
claimed as a donation. Societies that send
 +
delegates to a conference should ask for a report
 +
on the conference activities.
 +
 +
'''Non-Deductible Expenses:''' An item that a volunteer returns to private use at
 +
the end of its current society use does not
 +
qualify as a deductible donation. For example, if
 +
the newsletter editor purchases a printer, it is
 +
deductible only if the printer is used exclusively
 +
for the newsletter and is either worn out or
 +
passed on to the next editor at the end of the
 +
current editor’s term. However, if another
 +
member gives the printer to the editor for
 +
society use, the entire cost is a donation from
 +
that member. The item must be passed on at the
 +
end of the editor’s term or it would be
 +
considered a gift to the individual.
 +
 +
'''Vouchers and Receipts:''' Volunteers often spend money as they fulfill the
 +
requirements of a project or an office. A
 +
Donated Expense Voucher included in your society’s volunteer materials
 +
will help track expenses throughout the year.
 +
The voucher will meet the IRS requirement that
 +
a nonprofit society provide a donation receipt
 +
for donations over a specified amount. The
 +
voucher should include a place for the
 +
volunteer’s name, position, and contact
 +
information. The volunteer must sign the form
 +
as a guarantee that the expenses are legitimate.
 +
The expense voucher columns can easily be
 +
adapted to reflect the accounts set up in your
 +
society’s bookkeeping system. Possible column
 +
designations include those for supplies, meeting
 +
expenses, postage, travel, education, or anything
 +
else that fits your normal bookkeeping system.
 +
Another option is to establish one column for
 +
amounts and a second column in which you
 +
designate the expense category.
 +
 +
When the society receives the form from the
 +
volunteer, the treasurer (or other person
 +
responsible for tracking volunteer contributions)
 +
should make a copy of the form. The copy
 +
should be signed and dated to make it official.
 +
Attach the receipts submitted to the copy and
 +
return it to the volunteer as a receipt for their
 +
donation. They should keep the form and
 +
receipts with their annual tax information.
 +
The original form (signed and dated by the
 +
person who accepted the form) should go
 +
through the society’s bookkeeping system and
 +
filed with the society’s receipts. The total should
 +
be treated as donation income and the actual
 +
items entered as expenses, just as if a check had
 +
been written.
 +
 +
If you follow these simple procedures, both your
 +
volunteers and your society will reap the
 +
benefits of a well-managed volunteer donation
 +
program.

Latest revision as of 23:41, 13 August 2013

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