501c3 Organizations Need People To Grow
All 501c3 and nonprofit organizations need people to ensure that the organization grows and thrives. Large nonprofits which are successful have an army of people running the organization’s programs and activities as well as handling the administrative functions of the organization.
We, at Floyd Green CPA, group the people who work and serve nonprofit organization into 3 main groups:
- Volunteers
- Employees
- Contractors
All three groups are valuable to nonprofits as each group brings a set of skills, expertise and enthusiasm.
Volunteers. Many small 501c3 organizations operate exclusively by using volunteers. Volunteers are unpaid individuals who perform duties and services for the organization. Some volunteer jobs may involve lower skill responsibilities – such as passing out pamphlets at a function or greeting visitors at an organization function.
Other volunteer positions may be of higher level, such as serving as an unpaid board member or officer of the organization. One of the most important things that volunteers bring to the organization is enthusiasm. As these individuals are not being paid for the position, they are serving your organization because they like your mission, believe in your program and have a sincere desire to help your organization succeed. And because these individuals receive no compensation, they help the organizations’ finances significantly.
Employees. The employees are the set of individuals which can be dependent upon to serve specific functions at the organization. Whether part time or full time, some positions within the organization are of such nature that they require a dedicated person to serve. The dedicated person (the employee) is usually more dependable when they are getting paid to serve in the position and will likely have set hours of work requirement. Nonprofits often pay less than for-profit businesses, but can often compensate for the difference by offering more flexibility, more vacation or some other benefit. The negative of having someone as an employee rather than as a volunteer – employees may only be there for the pay check and not bring the same level of enthusiasm. Employees also cost the organization financial resources. Also, your organization will have to pay payroll taxes (approximately 10% of salary) on all individuals classified as employees.
Contractors. Individuals who serve as contractors to the organization generally will bring a set of skills or expertise that is valuable to the organization and that expertise is costly. Thus, the organization likely cannot afford to have the contractor work as many hours as an employee or the organization only needs the contractor for a limited number of hours periodically. For instance, a CPA, attorney or computer technician may serve as a contractor and may be used as needed by the organization. Benefit of having contractors – you do not have to pay payroll taxes on contractor pay; and it is easier to use contractors when the work is temporary or just needed periodically.
Thus, all 501c3 and nonprofit organizations should make adequate use of all the groups discussed above in an effort to maximize the nonprofit organization’s success.
