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Within the scope of the two above-stated rules, it is possible to craft a remuneration package. However, to say that paying 20% of what a professional fundraiser would receive, provides valid rule for avoiding a loss of tax-exempt status, is, I believe erroneous (though, you are welcome to show me the legal authority that states this rule, and I'll be happy to reconsider my answer).
The proper analysis is not found by reducing the individual member's payment for services, but rather by determining whether or not the organization's gross receipts from fundraising exceed 35% of all gross revenue.
Hope this helps.
I may not have been as clear in what I am asking as I should have been. I am trying to reimburse our members for their volunteer time in a manner in which they do not become considered employees and thus exposing us to FLSA, tax liability and worker's comp. The extent of this reimbursement would not exceed $50-75 flat rate, and could be paid up to twice a year. I am unsure of the legality of this. The 20% I referred to seems to only come up in regards XXXXX XXXXX fire departments and references the DOL, but I am having a tough time finding it on their website.
Oh, yes, very different issue.Federal Dept. of Labor regulations (29 C.F.R. 553.101) define a volunteer, as follows:
As you can see from the definition, there is no threshold amount below which a volunteer becomes an employee. Any compensation paid to a person in exchange for personal services risks having the person being deemed an employee under the Fair Labor Standards Act.Moreover, Wisconsin law would almost certainly require that you carry workers compensation insurance and pay unemployment insurance contributions for your fundraisers -- because they are not professional fundraisers, who engage in this sort of activity for profit, such that they can represent that they are independent contractors, entirely subject to their own control as to the manner and method of their labor. BotXXXXX XXXXXne, the reason why you can't find exceptions in the law is because there aren't any. If just one person is injured while fundraising, or if someone complains to the IRS or Wisconsin Employment Commission, your organization may be in very hot water. I realize that this is not what you want to read, but I have been down this road many times, and the government wants its money, and it will strongly contest any attempt to classify workers as other than employees.
Note: The U.S. Department of Labor provides this opinion letter concerning volunteer services. The letter discusses certain "nominal" payments which will not trigger employment status among volunteer workers. However, the letter shows that there is no threshold amount and that each circumstance is unique, so no advance guidance can guarantee you protection from liability for creating an employment relationship with your members. Please let me know if I can be of further assistance.