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May we pay volunteers for training?

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May we pay volunteers for training?

Our 501(c)(3) Search & Rescue team provides no-cost medical training to team members. Some trainings require 3-7 days attendance during the work week and that creates a financial hardship for those who miss work and lose pay while being trained. Can we supplement that no-pay time off with funds we have received as contributions?

I am assuming that most of your search and rescue team members are volunteers, like volunteer fire fighters, when actually performing their tasks in an emergency, but it doesn’t make a difference for the answer to your specific question. A charity is permitted to use charitable contributions to purchase goods and services utilized in performing its mission. Reimbursing or paying team members who are being trained so that they are better able to perform their mission is clearly an appropriate expenditure of contributed funds. For-profit businesses regularly pay new employees while they are being trained before being let loose on customers. Training is an important part of providing good service.  

There are two other issues you will want to keep in mind. First, the pay is probably considered compensation on which the trainees would have to pay federal income tax and you may have to provide a 1099 to report it. Second, if the compensation is sufficiently large it may eliminate the personal protection of the federal Volunteer Protection Act or a similar state law. The limit for the federal Volunteer Protection Act is $500.  (See Ready Reference Page: “Nonprofit Law Protects Nonprofit Volunteers”)

Tuesday, January 5, 2021

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