Utilizing Employees as Volunteers

When employees volunteer in their own workplace, it blurs the lines (factually and perceptually) between employment and voluntary engagement. It can become very difficult to distinguish between what employees do for salary and what they do voluntarily. This article looks at the legal and management implications of allowing staff to volunteer within the same organizational structure. Click here.

Nonprofit Employees and Volunteers

Fair Labor Standards Act (“FLSA”) provides that true volunteer activities are not impeded or discouraged while minimizing the risk that the FLSA’s minimum wage and overtime requirements were being abused by employers. Amending the act in 1985, Congress made clear that a volunteer may receive “no compensation,” but may be paid “expenses, reasonable benefits, or a nominal fee.” An individual will be considered a volunteer under the FLSA if the individual:
(1) performs hours of service for a public agency for civic, charitable, or humanitarian reasons, without promise, expectation, or receipt of compensation for services rendered; although a volunteer can be paid expenses, reasonable benefits, or a nominal fee to perform such services;
(2) offers services freely and without pressure or coercion; and
(3) is not otherwise employed by the same public agency to perform the same type of services as those for which the individual proposes to volunteer. This last provision is explored in a newsletter available here.

Type III Supporting Organizations - Attorney Comments

Attorney Ruth Madrigal of Caplan & Drysdale wrote an open letter to Treasury Tax Legislative Counsel Susan Brown. In it, she discusses how any forthcoming guidance regarding Type III Supporting Organizations that support governmental entities should take into consideration the special circumstances that affect such organizations' abilities to meet the new "functionally integrated" requirements imposed by the Pension Protection Act of 2006. Full Text

Service to Provide Technical Guidance on PPA for TEOs

Notice 2007-45 provides interim guidance on section 6104(d)(1)(A)(ii) of the Internal Revenue Code, added by the Pension Protection Act of 2006. Section 6104(d)(1)(A)(ii) imposes a new requirement on all organizations exempt under section 501(a) and described in section 501(c)(3) to make available for public inspection a copy of their Form 990-T filed with the IRS. It will be published in IRB 2007-22 dated May 29, 2007.

IRS Guidance on Public Inspection of Form 990-T

Notice 2007-45 gives interim IRS guidance on section 6104(d)(1)(A)(ii) of the Internal Revenue Code, added by the Pension Protection Act of 2006. The Act imposed new requirement on all organizations exempt under section 501(a) and described in section 501(c)(3) to make their Form 990-T available for public inspection. Full text.

IRS Guidance on Telephone Refund for Churches and Nonprofits

The annual May 15 filing deadline is here for many nonprofits, and the IRS urges any of these organizations that paid the three percent telephone tax to be sure to request this special refund. The telephone tax refund is also available to churches and small tax-exempt organizations that don’t normally file annual returns with the IRS. Get details and additional links in news release IR-2007-99.

Guidance on Conflicts of Interest

Council on Foundations Issues Conflicts Guidance. When a foundation shares board members with grantees, is this simply mutual benefit or does it create a conflict of interest? The Council on Foundations has asked its members to ponder this issue, and it shares some of their opinions in a recent article. No surprises here: There are two sides to every story. As long as appropriate precautions are in place, grantees and grantors can all benefit. But if there are any concerns about the perception of favoritism or personal benefits, boards might want to reconsider this practice. Click Here

Foreign Gifts

The U.S. Department of the Treasury has posted a helpful risk-management grid to guide nonprofit organizations involved in international activities. This tool focuses on grantmaking and is designed to help charities (including foundations) comply with U.S. sanctions that prohibit transactions with suspected terrorists. The grid not only helps identify potential illegal activity or abuse but also serves as an additional due diligence tool. See Guide