This post on volunteers is the first in a series prompted by questions from my friend Kathy, who has been an active volunteer, but never an employee or board member, within the nonprofit sector. We hope this perspective will be helpful to both volunteers and nonprofit managers and board members who are responsible for managing volunteer programs.

Often when I volunteer I am required to record my hours. What is this used for? Why do some require it and others do not? 

Many charities ask their volunteers to record the hours they work. While there may be great variation in how they use such data, there are some potentially important uses:

• Provides data about how much work is required to accomplish particular tasks, which is important to management
  • Informs how many person-hours may be required to accomplish the tasks in the future
  • Informs how certain changes (internal or external) affect the amount of work required to accomplish the tasks
• Provides information for grantmakers and federal and state regulators that either require such information or make it optional
• Evidences that certain charities are much more substantial than may otherwise appear just from their financials (e.g., an all-volunteer organization might provide thousands of hours of services to its beneficiaries but have a tiny budget)
• Provides information for academics and policy makers to better understand the size and scope of the charitable sector (see https://www.nationalservice.gov/vcla/national – nearly 8 billion hours)

Some organizations require background checks and others do not. What determines this?

Background checks are often required when working with vulnerable populations (e.g., children, patients) or sensitive materials. Some activities may require charities to conduct background checks for their volunteers and employees, and others may cause some charities to determine that background checks, while optional, would be a good risk management practice. See https://www.nonprofitrisk.org/resources/articles/background-checks-screening-and-your-nonprofit/.

If I am hired to work for a non-profit, and I still volunteer my time in addition to my employment responsibilities, how do you determine where that line is?

Generally, lawyers discourage having employees of a nonprofit also serve as unpaid volunteers. Such practice looks ripe for managers to unlawfully coerce employees to work for free or suffer potential employment consequences. It also may create issues for workers’ compensation insurance, which usually doesn’t cover volunteers. On rare occasion, it may be okay to have an employee volunteer where the volunteer work is completely different from the scope of the employee’s employment (e.g., a charity doctor agrees to volunteer as a musician for the charity’s fundraising event). See https://www.oneoc.org/media/1098/volunteers-and-the-department-of-labor.pdf.

As a volunteer, if I believe to see a misuse of funds how can I report it?

A charity may have a whistleblowing policy to report unlawful actions like a diversion of charitable assets. And, typically, volunteers should report such actions to their supervisors. But volunteers who believe they may have witnessed a misuse of funds must be careful not to make frivolous or inaccurate claims as they can result in all kinds of harm, including a lawsuit against the claimant by any persons harmed by such individual’s defamatory statement. Accordingly, volunteers should recognize that any use of funds that they simply disagree with may not rise to the level of an unlawful misuse of funds. However, if a volunteer witnesses a clear case of embezzlement or other fraudulent misuse of charitable funds, and it is not addressed internally by the charity, the volunteer may report it to the state authorities (e.g., the California Office of the Attorney General), Internal Revenue Service, or, depending on the crime, local authorities (e.g., local police). See http://www.perlmanandperlman.com/embezzlement-board-liability/.

Are there differences between volunteering as an individual, as a group (i.e. profit for a non-profit), or a church group (i.e non-profit for a non-profit)?

There may be. When volunteering for one charity as part of a separate group, there may be the question of whether the volunteer is really acting as a volunteer. For example, if a “volunteer” for a food bank is performing such services while getting paid by her or his employer that has required such employee to “volunteer” for the food bank as part of its corporate citizenship program, the employee, unlike the true volunteer volunteering in her or his individual capacity, may still be protected by employment laws and workers compensation. It’s a little different for a church group, which may be mostly made up of volunteers for the church. In such case, the question is whether the church or the food bank is responsible for the volunteer. This may depend on the particular facts and circumstances.

How can I confirm a non-profit is legit?

Usually, when examining a charity’s legitimacy, people first look at whether it is recognized as a 501(c)(3) organization by the IRS. Generally, this can be done by examining the EO Select Check site accessible on the IRS website – https://www.irs.gov/charities-non-profits/exempt-organizations-select-check (though churches are often not found on the site because they can claim charity status without formal application or recognition by the IRS). But it may also help for some donors or volunteers to look beyond that one basic criteria. Most charities must file annual information returns (Forms 990) with the IRS and such returns are available for public view on Guidestar.org. Much information may also be found by reviewing the charity’s website and visiting the charity’s place of business. And it never hurts to do a search of the charity’s name. Some donors and volunteers also look at charity review sites, but when the reviews are based on criteria not fully transparent to the viewer, they need to be examined with at least a little skepticism even if they provide a good deal of helpful information.

Are non-profit board meetings open to the public?  How are board members selected?

Generally, nonprofits are, like for-profits, private organizations. In most cases, their meetings are not open to the public. However, when nonprofits take public funds (e.g., funds from government agencies) and/or have members of their boards appointed by government agencies, they may be subjecting themselves to local or state open meetings laws that apply under those circumstances. Under such “sunshine” laws, they may have to open at least some of their board meetings to the general public.

Board members (or directors, as they are referenced in the Corporations Code) may be selected in a variety of matters, consistent with provisions of their bylaws or articles of incorporation. Most commonly, charities have self-perpetuating boards in which the board elects directors. Some charities have voting memberships that elect board members. But voting memberships are much more common in other types of nonprofits like unions, trade associations, and homeowners’ associations. Other possible ways of selecting a director include appointment or designation by a person or entity (e.g., a national charity may be given the rights of a designator to designate a board member of its local affiliate) and operation of a bylaw that recognizes an individual as an ex officio board member, which means that such individual automatically is a board member by virtue of some other position she or he holds (e.g., the Executive Director is sometimes made an ex officio board member, not by election or designation, but by virtue of holding the position of Executive Director, and only for so long as she or he holds such position).

Do HR policies apply the same to volunteers as employees?

Employment laws generally do not cover volunteers. And most HR policies reflect employment laws and rights and obligations of employees, though some policies may in part include provisions covering volunteers.

My work gives 2 days a year to employees to volunteer?  Is there a tax advantage for the company or is it altruistic?

Corporate giving to charities, including through the provision of its employees, is generally motivated by a mix of altruism, marketing, and employee recruitment and retention. Generally, while charitable contributions by a corporation may be eligible for an income tax deduction by the corporation, they don’t, in and of themselves, financially enrich the corporation more than if the corporation simply retained the contributed funds and paid taxes on them. And the provision of services is not deductible.

Is being a nonprofit all or nothing or can you be somewhere in the middle?

Good question. Legally, “nonprofit” refers to a type of organization that has no owners and therefore provides no distributions of profits to owners. But most people use the term nonprofit when referring to an organization exempt from income tax under Section 501(c)(3) of the Internal Revenue Code (generally, charitable organizations, most of which are eligible to receive deductible charitable contributions).

Over the past few years, there have been developments in the law recognizing certain new legal entities that are taxable for-profits which have some of the attributes of charitable nonprofits. The most common of these is the benefit corporation. The benefit corporation has owners and can make a substantial profit for its owners, but it must also pursue a public benefit purpose and its owners must factor certain public benefit factors when selling the corporation (so they don’t necessarily have to sell to the highest bidder, which may otherwise be the case when even one minority shareholder of a corporation wants the most money out of any sale).