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5 Tips to Effectively Manage Volunteer Expenses for Your NFP
Having people volunteering for your NFP entails volunteer expenses that you must reimburse. Here are some tips to effectively manage these expenses.
What would not-for-profit organisations (NFPs) be without their amazing volunteers? From their undying passion to help to their ever-so-useful efforts, volunteers are a much-appreciated and crucial asset for all NFPs. It’s not always about the hands-on work, though. When your NFP has volunteers, you must remember that this entails volunteer expenses and reimbursements.
In this blog, we discuss volunteer expenses for NFPs and how to properly manage them.
What Are Volunteer Expenses?
Volunteer expenses are money that a volunteer spends while doing their volunteer work. Examples could include travel to and from the place where the volunteering happens, meals, supplies, cost of training or any expense that the volunteer incurs on the job.
Just like any employee working for a business or for-profit organisation, volunteers, too, must be reimbursed promptly for the expenses they incur to perform their work—if not already given access to funds before the spend!
Why Should My NFP Reimburse Volunteer Expenses?
When your NFP reimburses volunteer expenses, you ensure that your volunteers won’t be out of pocket due to their volunteering. Prompt reimbursements for expenses incurred by volunteers aid both the NFP and the volunteers.
Apart from making sure that they won’t be out of pocket, you also get to increase the potential number of people who may volunteer and support your cause. It shows efficient working and strengthens the credibility of your organisation amongst volunteer workers.
Reimbursing volunteer expenses is a legitimate cost linked to any volunteer project. Organisations should guarantee that this is part of the organisation's budget, boosting transparency and financial compliance.
What Expenses Should I Reimburse?
Just because we encourage reimbursing volunteer expenses, doesn’t mean you must reimburse all of them. Here are examples of expenses you could include in your reimbursement policy:
1. Travel costs
Travel costs that volunteers incur to and from the place of volunteering can be reimbursed. This is especially applicable when the volunteers are required to go somewhere as part of their volunteering—not when they can do volunteer work from home.
There are also times when NFPs may offer to reimburse fuel costs.
When a person volunteers, the NFP must provide all the resources that the volunteer needs to be able to do the task, and that includes meals. You want your volunteers to be in good health and have the energy to provide their volunteering services. It’s also a tiny way to show them your gratitude and appreciation.
For meal expenses, NFPs usually give the volunteers a certain budget per day/meal. The budget is subsidised and a standard amount for a healthy meal and does not account for expensive or fancy meals. Some NFPs prefer providing actual meals in place of reimbursing expenses, where possible.
Supplies that the volunteers buy and use for the task are also a cost that you must reimburse. For example, if the volunteer work involves creating a banner for an event, your NFP can reimburse the costs spent on the canvas, paint and paintbrushes.
4. Cost of training
The knowledge that volunteers gain from training is a valuable asset that they’ll apply to their volunteer work. If, for example, the volunteer attends first aid training to volunteer for your NFP, you must reimburse the cost they spent for that.
To avoid reimbursing inappropriate expenses, make sure there’s a written policy in place that details all the expenses that a volunteer can claim reimbursement for.
Tips to Effectively Manage Volunteer Expenses
1. Have a written policy on expenses
To make sure that your volunteers don’t ask/expect to get reimbursed for unnecessary purchases, your NFP must have a written policy on not-for-profit expenses.
A written policy for volunteer expenses should detail exactly what kind of expenses volunteers can claim, how they should make the claim and how the reimbursement will be paid.
2. Encourage them to claim expenses
Some volunteers may feel shy to request a reimbursement because they feel that the expense they incurred is part of their service to the organisation. However, aside from promoting equality and morale, reimbursing volunteer expenses will also help the organisation determine how much a project costs. In the long run, it will help the organisation forecast budgets for volunteers and apply for appropriate funding.
Make it clear that reimbursing volunteers for expenses is part of the NFP’s planning.
3. Reimburse on time
Always reimburse volunteer expenses as soon as possible and have a proper policy in place that determines payment terms. This will not only help your NFP be financially empowered and avoid volunteers from being out of pocket but also promote a healthy reimbursement policy compliance.
Whichever process you choose for reimbursement, be sure that you have a process in place so you can easily log and track expense claims.
4. Have an expense management system
Having an expense management system in place allows you to see everything you need to create, approve and report on—all in one place. You get to track all volunteer expenses and see which ones have already been reimbursed, overdue, rejected, etc.
5. Issue virtual cards
Instead of reimbursing physical cash, you may opt to issue virtual cards to your volunteers instead. A virtual card will allow you to set a limit to their spending and will give you visibility on the who, what, when and where of the spending.
A proper volunteer expense management policy, process, and platform are essential for the health and growth of NFPs. By implementing these tools, NFPs can ensure that every dollar is being spent wisely and that they can achieve their mission more effectively.