Engaging Volunteers for Nonprofit Organizations: Summertime Tips for Your Nonprofit Clients 

Most nonprofits rely heavily on volunteers during the summer months to help them with various activities and programs such as fundraisers, community events, and local services. However, when it comes to engaging volunteers for nonprofit organizations, there are certain considerations your nonprofit clients should be aware of to avoid potential liabilities.

Proper Classification
When using volunteers, organizations must ensure that they aren’t inadvertently misclassifying individuals as volunteers when they are actually considered to be employees under federal law.

The U.S. Department of Labor (DOL) and the Internal Revenue Service have specific rules and guidelines for classifying workers. Suppose a volunteer is misclassified and considered an employee for purposes of the Fair Labor Standards Act (FLSA). In that case, the organization faces potential liabilities that include paying back wages and taxes, overtime pay, penalties, and attorney fees. Therefore, nonprofits need to understand the rules and guidelines to correctly classify their workers and avoid potential liabilities.

Compensation & Benefits
The DOL allows organizations to reimburse volunteers for any out-of-pocket expenses they may incur or to pay them a nominal fee for their services. However, while it is possible for a nonprofit to pay a volunteer, it’s essential to ensure that the payments are nominal and do not inadvertently classify the volunteer as an employee.

The DOL and the FLSA define volunteers as people who freely provide services without expecting compensation. However, the law allows a volunteer to be paid expenses (i.e., meals, transportation, or a uniform), reasonable benefits (i.e., a life or accident insurance plan), and/or a nominal fee to perform services. In this case, for a fee to be considered nominal, it must not be a substitute for compensation or tied to productivity and cannot exceed 20% of what an employer would pay to hire a full-time employee for the same services. Consulting with a legal professional or an HR expert can help your clients better understand compliance regulations pertaining to volunteers for nonprofit organizations and compensation.  

Potential Liabilities
Nonprofits should ensure that volunteers understand they are not paid employees and, as such, are not eligible for benefits such as workers’ compensation and paid sick time and that their volunteer status is not a means to obtaining employment.

Organizations should establish base criteria for selecting volunteers that outline their specific roles. To help prevent injuries and losses, they should also provide training and guidance, as is the case with paid employees working in the same capacities and performing the same duties.

Nonprofits must understand that the key to successful volunteer engagement lies in proactive measures to prevent issues before they arise and in having the proper insurance protection to help mitigate risks. When engaging volunteers for nonprofit organizations, it’s a good idea for your clients to consult with a legal professional or an HR expert to ensure they follow regulations and laws regarding unpaid help — not just in the summertime but year-round.

About Charity First 
The incredible services nonprofits provide come with unique and complex risks that are part of their everyday work serving the elderly, children, and other vulnerable populations. It is why Charity First is committed to providing our retail partners
nationwide with best-in-class underwriting, consistent and responsive service, and risk management services that include directors & officers liability insurance and accident insurance for volunteers and participants.

To learn more, please get in touch with us at 800-352-2761 or marketing@charityfirst.com.  

Reach out to Maureen Dyson, Area Executive Vice President, at maureen_dyson@charityfirst.com or connect with her on LinkedIn.