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Mission Matters Insights

Volunteering At A Charity

January 16, 2013

What constitutes as a charitable contribution deduction?

The Corporation for National and Community Service recently published their latest data on Volunteering and Civic Life in America. The Corporation is an independent federal agency that plays a vital role in supporting the American culture of citizenship, service and responsibility. It runs the Senior Corps, the AmeriCorps and the Social Innovation Fund among other programs.

Their recent report disclosed that 26.8% of Americans volunteer and contribute over 7.8 billion hours of time. People living in rural and suburban communities are more likely to volunteer than those living in urban areas. The overall volunteer rate has been fairly constant since 2006 when it dipped from the higher rates experienced in 2003 - 2005. Volunteer rates in both Massachusetts and Rhode Island are higher than the national averages although both states rank in the bottom third of state rankings. This is because volunteer rates are extremely high in the mid west and northwest and extremely low in the south and southwest.

Obviously, donating time and energy to your favorite charity is another way of supporting its efforts other than by donating financial resources. For many people, the ability to donate time significantly exceeds their ability to contribute financially. A good charity will recognize this and take measures to marshal the volunteer effort offered to it to maximize its effectiveness.

Many organizations now employ a volunteer coordinator who recruits volunteers and helps assure that the donated energy advances the organization’s mission. In some organizations it is possible to be terminated from your volunteer job if your performance is not up to par. If an important job or task is being performed by a volunteer, it should be understood by all that the performance of that volunteer is no less critical than the performance of a paid employee in their particular job.

People often ask us if they can claim a charitable contribution deduction for their volunteer work. Unfortunately, this is not the case. While a financial contributor can deduct their charitable financial contribution on their tax return, the volunteer cannot do the same for the value of their donated time. However, you can deduct any out-of-pocket costs associated with your volunteer work. One of the primary out-of-pocket expenses incurred by the volunteer is the cost of commuting to your volunteer job. You can deduct 14 cents per mile for all mileage traveled in connection with your volunteer work. You may also deduct the actual cost of travel when you travel by a method other than your personal automobile. If your travel includes other out-of-pocket costs such as meals and lodging, you should keep accurate records and discuss these expenses with your tax advisor as they may also be deductible as charitable contributions.

If you have questions about your charitable contribution deductions please contact any member of the NFP Services Team.

As one of the largest CPA firms in Boston, KLR is unique because they service over 220 not-for-profit organizations with compliance and consulting services. We have extensive experience helping Nonprofit organizations regarding boards, and board responsibilities, charitable contributions, taxes and 990 filing requirements. The KLR Nonprofit team is active in our local community and not-for-profit organizations, visit our Facebook page to see photos from our latest volunteer event.

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