Should Our Nonprofit Sign a Contract With Volunteers?

Contracts with nonprofit volunteers can define the relationship, states what’s expected, and help to protect your nonprofit from liability issues.

Because volunteers are by definition unpaid, some nonprofits make the mistake of not taking their relationship with them seriously, thus failing to agree on important matters in advance. That’s why a contract with a volunteer is an important tool for your nonprofit. It defines the relationship between your nonprofit and the volunteer, states what’s expected of a volunteer, and helps to protect your nonprofit from liability issues.

While it’s not legally required to have a written agreement with volunteers, it is beneficial to do so.

Why a Volunteer Contract Is Important

Here are the main reasons to prepare contracts and obtain signatures from volunteers before they start working on your nonprofit’s behalf.

The contract defines the relationship. A volunteer is neither an employee nor an independent contractor. Volunteers donate their time and expertise to a charitable organization, with no expectation of payment in return. For legal and tax purposes, it’s important to define their status; and the best way to do so is in a written contract.

Without this designation, a volunteer could be viewed by governing authorities as an employee or independent contractor, causing your nonprofit to encounter legal and tax issues. For example, if your state employment board decides that one of your volunteers is an employee, then it can hold your nonprofit, as the employer, responsible for that person’s actions. That means if the volunteer/employee injures another person while on the job, your nonprofit may be held legally responsible.

Defining the relationship in a written agreement is thus a good step towards protecting your nonprofit.

A contract lays out expectations. Written documentation of what your nonprofit expects from its volunteers becomes useful both for preventing and dealing with imperfect memories or disputes.

If your nonprofit uses volunteers for an event, for instance, it’s necessary to tell each volunteer what he or she can and can’t do. For example, volunteers at a gala dinner may be expected to greet attendees, direct them to a table, or encourage them to participate in a silent auction.

However, your nonprofit may want to create a rule saying that volunteers cannot handle donations. (Perhaps it’s your nonprofit’s policy that only board members are permitted to handle donations at an event.) If that’s the case, your nonprofit will want to make sure that policy is stated in a written agreement and that the volunteer is aware of the appropriate money-handling procedure.

One thing to remember when setting expectations is that, since a volunteer is not an employee, your nonprofit cannot exercise too much control—for instance, by telling the volunteer that he or she must work certain hours and complete certain tasks or be let go. If your nonprofit sets these types of expectations, volunteers may be legally considered employees, which can cause issues for your nonprofit.

A contract can help protect your nonprofit. It’s important to define who’s liable for any injuries that might occur on the “job.” For example, if a volunteer is injured while serving your nonprofit, then your nonprofit may be held liable for that injury. While your nonprofit should have insurance to cover this type of incident, it should also include language in the contract that specifically releases your nonprofit from liability.

Likewise, if a volunteer injures someone, such as an attendee at an event, there should be language in the contract that makes the volunteer liable, not your nonprofit.

Having this specific language in the contract helps take the guesswork out of who should be held responsible for injuries and avoids lawsuits.

What to Include in a Contract with a Volunteer

A contract with a volunteer does not have to be long or complicated, but it should include some key clauses.

Volunteer information. Your nonprofit may already have this information from a volunteer application or from a general database. Regardless, it never hurts to collect it again. Make sure to get the volunteer’s name, address, phone number(s), and email address.

Term of service. This area of the contract will vary depending on what the volunteer is being brought on for. If it’s for a specific event, the term may be for that event only. If the volunteer will be serving your nonprofit in other ways, such as mailing out brochures, making phone calls, or providing office support, the term may be longer, such as six months or one year. While a term can be stated, it’s important to remember that a volunteer is not an employee, and therefore action cannot be taken against the volunteer who doesn’t show up or leaves before the term is up.

Event information. If the volunteer will be helping out only with a specific event, the contract should include information about the event, such as its name, location, and any time slot that the volunteer has agreed to work. For volunteers who work with your nonprofit on an ongoing basis, it’s not necessary to have a separate contract for each event they work; just be sure to provide them the event information in another manner.

Volunteer expectations. A contract should include any specific expectations of the volunteer. For example, for an event, a volunteer may be expected to help with set-up and teardown, food preparation or serving, or general support during the event. If the volunteer will be helping out with office support rather than at an event, the contract can state specific expectations so the volunteer has an idea of what to do upon arrival. While the contract can state expectations, it shouldn’t be as specific as with an employment contract, so that there is no confusion about the fact that the volunteer is in fact a volunteer.

Policies. In addition to expectations, your nonprofit may have general policies that all volunteers need to follow. These can include attending volunteer orientation or training, wearing a uniform at events or while on site at your nonprofit, and agreeing to your nonprofit’s code of conduct. While the contract probably won’t list every single policy, your nonprofit may want to consider a separate handout of policies and procedures and then reference that handout in the contract.

Compensation. This may seem like a no-brainer, but the contract should state that the volunteer will not be compensated for the completed work, nor be reimbursed for any expenses incurred. Both stipends and reimbursements can be seen as taxable income, which can make it more likely that the volunteer is an employee. If your nonprofit wishes to give stipends or reimbursements to volunteers, it’s best to consult with a tax advisor first.

Indemnification. An indemnification clause in a contract is a requirement for one party to defend another party in a lawsuit. For example, if an event attendee is injured at your nonprofit’s event, that attendee may seek reimbursement from your nonprofit for injuries because it was the host. But if the volunteer is the one who caused the injury, it should be the volunteer’s responsibility, not your nonprofit’s. By agreeing to an indemnification clause, the volunteer agrees to defend your nonprofit if a situation like this arises.

Waiver and release. It’s possible that a volunteer will get injured while volunteering. A waiver and release clause has the volunteer waive any claim against your nonprofit and release it from liability. Exceptions may apply to the waiver and release; for example, if the injury was caused by gross negligence, your nonprofit may be held liable regardless of whether there’s a signed waiver and release. But if the injury was caused by the volunteer’s own negligence, that should not be your nonprofit’s responsibility.

A contract with a volunteer is an important document that your nonprofit should utilize. While the contract isn’t complex, it does include some important legal language. Therefore, it might be beneficial to use a lawyer to draft, or in the least, review, your nonprofit’s volunteer contract.

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