Churches and charities rely heavily on their volunteer workforce to achieve their vision and purpose. Without volunteers, much of what you do as an organisation wouldn’t be possible. Therefore, it’s important to consider how best to thank volunteers. Let’s explore how you can give gifts to volunteers.
Third Sector recently reported that volunteering in England and Wales contributes over £300bn annually. This shows just how important volunteers are to charities!
Many charities work hard to ensure that volunteers feel appreciated and valued. This can involve coming up with meaningful ways to thank volunteers and celebrate their contributions; the time they give, and the difference this makes. This might be a handwritten card, a thank-you meal, or you might wish to purchase a gift to express appreciation.
What to consider when giving gifts to volunteers
1. Are we allowed and is it appropriate to give a gift?
All charitable expenditure must be within the charitable objectives of your organisation – that’s non-negotiable. Additionally, all restricted expenditure must also be within the boundaries of the restricted donation or grant. Trustees have a duty to ensure the charity keeps to these rules. But you may decide that spending some money to show your volunteers how much you appreciate them and their contribution to the work of your organisation is money well spent.
If you are wondering whether your proposed expenditure is permissible, you should contact your Independent Examiner or Auditor for advice.
What does giving a gift to a volunteer communicate?
Volunteer time is so valuable to churches and charities that the desire to demonstrate appreciation makes complete sense. In fact, volunteers feeling appreciated is both important and necessary for most churches and charities to function and achieve their charitable purposes.
On the other hand, it’s important to remember that a volunteer is actively deciding to give their time to your organisation for free. There should be no expectation of remuneration or thank you gifts.
If there is an expectation of remuneration or gifts, or a requirement for an individual to give their time, then you should review this carefully. Where there are these expectations, you risk the individual’s legal status changing from a volunteer to an employee. And that brings potential unintended consequences.
There should be no intrinsic need for churches and charities to show appreciation to volunteers by giving gifts, monetary or otherwise. Indeed, in some circumstances, giving a gift may diminish what the volunteer is trying to do for your church or charity. Or it could even upset volunteers who would rather you use the money for other things.
Equally, giving gifts to some volunteers and not others can devalue, demotivate, and disillusion some groups. You may think it would have been better to give none at all!
You may want to consider adopting a policy on volunteer appreciation, meaning you have guidelines to follow. This allows you to be consistent and not have to exercise individual discretion in every case. Don’t forget to both regularly review policies and have a plan to ensure you can action them operationally.
What about volunteer expenses?
Reimbursing out of pocket expenses is entirely separate to giving discretionary thank-you gifts. Reimbursing expenses is important, since while volunteering is unpaid, your charity should cover expenses.
For example, if someone asks a volunteer to buy refreshments for an event, then the charity should offer to cover this cost. You should also consider whether your process for claiming expenses is quick, easy and accessible for volunteers. If claiming expenses either takes a long time or requires the volunteer to start what might be an awkward conversation, this is both unfair and may be de-motivating to the volunteers.
Some volunteers may turn down the offer to claim expenses. Whilst this can be helpful in lowering charity expenditure, it can be unhelpful in having proper visibility of expenditure. It can also make other volunteers who do wish to reclaim their expenses feel uncomfortable. It also means your charity misses out on Gift Aid you could claim. The volunteer who turns down the reimbursement should instead accept the reimbursement and then donate the money back to the charity.
Check out this helpful article by the National Council for Voluntary Organisations for guidance on which expenses to cover.
Expenses Policies
Most churches and charities have an expenses policy for staff and an expenses policy for volunteers. The two may not necessarily be the same. If you don’t already do so, then in your volunteer induction, it could be helpful to provide volunteers with information about your (volunteer) expenses policy, what expenses can be claimed, and details of how they go about submitting claims, with an expectation as to how quickly you typically pay claims.
Find out more about policies, including a template policy you can download, in this blog post: Purchasing Policies for Churches
2. What form should the gift take?
What type of gift is appropriate for volunteers?
Gifts generally fall into two categories: monetary and non-monetary. Your organisation’s trustees will need to decide which is appropriate in each case, but our experience tells us that non-monetary gifts (which are less quantifiable by the recipient) are usually safer. These communicate that you want to thank the recipient with an experience or item to convey your thanks, rather than placing a financial value on their time.
Here are some ideas of non-monetary gifts you could consider (ranging roughly from most to least expensive):
- A voucher for a meal or experience
- A team social with a couple of rounds of drinks paid by the organisation
- A commemorative photograph or other artwork, reminding your volunteer of their happy times spent with your organisation
- Provision of luxury baked goods during the volunteering sessions
- A handwritten card with a heartfelt message of thanks
- A ‘shout out’ to a volunteer of the month with a message from your staff team expressing your thanks and giving encouragement e.g. a video on social media, or in your newsletter
If you know someone who knows the volunteer well, then you may find it easier to find out about their interests or what they would enjoy. This will enable you to give a gift that is even more meaningful and communicates thoughtfulness as well as gratitude.
One-off or regular gifts?
Typically, you should avoid regular financial gifts for a service or duties, as you could unintentionally move from the individual being a volunteer to them being classed as an employee.
There may be a place for small one-off gifts to thank someone for an out of the ordinary contribution to your organisation. For example, being a guest speaker at an event, or stepping in to provide cover in a critical situation where this was particularly inconvenient or sacrificial for them.
As long as payment isn’t pre-arranged, and therefore the service was given genuinely voluntarily, you may feel it is appropriate to offer a monetary gift of appreciation.
If, for example, the guest speaker is employed by another organisation, you may like to offer this gift from your organisation to their organisation, avoiding any personal liability for receipt. If the gift is made personally, the individual recipient may need to account for this for tax purposes, depending on the size of the gift and the total value of ‘gifts’ they receive in any one year.
Thanking volunteers is important! So, you may like to establish a regular pattern of expressing thanks. For example, through team socials, thank you cards, celebratory meals and non-monetary gifts at specific times of year.
We know of examples where churches and charities hold volunteer parties or dinners (where the staff serve!), provide Christmas gifts to team members, or operate other volunteer appreciation initiatives such as ‘volunteer of the month’ or discount schemes such as Charity Worker Discounts.
What amount is appropriate to spend or give?
You should make sure the value of the gift (amount of money) is appropriate:
- For your organisation. Can you afford it? Is the level of financial gift appropriate to your organisation’s total income? Does it match how you treat other volunteers, pay your staff, etc.?
- For the individual. Will they feel appreciated by the gift or offended? Will the receipt of funds be significant for them? Does it affect their tax status or eligibility for other benefits, etc.?
- For the service you are thanking them for. Does it adequately express the value of their contribution to your organisation? For example, if they have given up their whole weekend to lead a residential conference for you, a £50 gift of money may not come across as appreciative and generous. In fact, a card, bottle of wine and hamper, even if purchased for a similar value may show your appreciation in a greater way.
This article from the Low Incomes Tax Reform Group helpfully outlines some of the tax implications regarding making a gift to volunteers.
3. Technical factors to consider when giving gifts to volunteers
How should we account for gifts?
You should consult your Independent Examiner or Auditor regarding how to account for gifts. Gifts can refer to ‘grants’ to other organisations or individuals who are not working for your charity. It can also be an organisation-to-organisation payment made without a supporting invoice.
The ‘Gift of Money’ functionality with ExpensePlus will allow you to enter this type of transaction correctly, and you can add documentation where this is helpful as well.
Having a policy in place to support the justification for giving a gift of money, and a multi-person approval process to demonstrate accountability and good governance is also good practice.
When does a volunteer become an employee?
Any gifts given must not be given as remuneration for any work or duties carried out on behalf of the charity. By definition, volunteers must not receive pay for work, and can only receive genuine out of pocket expenses.
This highlights the main area of risk for charities when making monetary gifts to volunteers. Making a financial payment to a volunteer for their work in a charity setting could suggest an employment relationship, resulting in specific legislative and taxation obligations.
A volunteer provides services to an organisation for free. Someone may be volunteering under a written agreement (which is good practice – see below), but they are not obligated to complete their service. They are freely giving their time and can choose not to at any point. Volunteers must not receive any financial remuneration (or benefits-in-kind) and can only receive reimbursement for genuine out-of-pocket expenses.
Conversely, an employee or paid worker is contracted to provide services to an organisation in exchange for remuneration. They are obliged to fulfil their contractual duties, and their remuneration is proportionate to their working hours and duties.
These two categories of charity workers (volunteer and employee) are distinct. This distinction should be maintained by avoiding providing financial remuneration or financial gifts to volunteers. This ensures the volunteering arrangement remains ‘voluntary’ and you should refer to expectations not obligations.
Volunteer = No payment and serving by choice
Employee = Regular financial payment (salary) and meeting obligations
Even remuneration described as a grant, bursary, subsistence payment or honoraria, when given to a volunteer who is serving your organisation can constitute payment and help, create an employment relationship and tax obligations. This is a common pitfall for internship schemes. This 9:38 article addresses this issue for a church context.
What if the volunteer is also a trustee, related to a trustee, or is part of your charity’s Key Management Personnel?
In your year-end accounts, you will need to declare any related party transactions. These would generally include payments to trustees (as well as donations from trustees), payments to relations of trustees, and payments to relations of Key Management Personnel.
Typically, you should seek permission from the Charity Commission before making (non-expenses) payments to trustees, unless this is specifically permitted in your governing document. You can read more about the Charity Commission’s guidance on payments to trustees here.
You should discuss with your Independent Examiner or Auditor what this means in your context, which gifts need declaring and in how much detail.
Find out more about what is important to state in your year-end accounts in these blog posts:
- Materiality in Charity Accounting
- What is a conflict of Interest? Examples and Guidance for Churches and Charities
Top tips to remember when giving gifts to volunteers
Here are our 5 top tips when giving gifts:
- Ensure volunteers do not expect thank-you gifts. A good test is perhaps, ‘Would the volunteer still turn up if we didn’t give the gifts we have done in the past?’ Remember it’s typically OK to pay pocket expenses as long as these are reasonable and proper receipts are kept.
- Ensure the value of gifts is proportionate, appropriate, affordable, justifiable, and in line with any policies you have. (And keep your policies up to date!)
- Consider which groups of volunteers need thanking and be careful not to forget anyone.
- If your gift recipients are trustees, related to trustees, or are Key Management Personnel, keep a record of the value of any gifts given for declaration in your year-end accounts.
- Contact your Independent Examiner or Auditor for advice where needed.
Further Information for giving gifts
Here are some links to further information on this topic:
- NCVO (National Council for Voluntary Organisations) provide helpful resources and guidance.
- Anthony Collins Solicitors and Keelys Solicitors have a legal specialism in advising charities and churches
- Churchworkers.net is an HR Support service provided by UCAN (UK Church Administrators Network)
- UK Government guidance on volunteering
To find out more about employment status, please view these links:
- Chartered Institute of Personnel and Development
- GOV.UK
- National Council for Voluntary Organisations
To find out more about writing volunteer agreements, please visit these links:
ExpensePlus is a cloud-based fund accounting software package designed for churches and charities. ExpensePlus makes managing fund accounts simple and straightforward.
