The Nonprofit FAQ

Do we need to report volunteer time to the IRS on Form 990?

Harriet Bograd wrote on August 11, 2006, to Cyber-Accountabilty (a service of CharityChannel.com to ask: I'm again working on the form 990 for the small nonprofit for which I'm now serving as treasurer. Each year, I take joy in working with http://efile.form990.org/ - and I really appreciate that it remembers our information from previous years. I've just encountered lines 82a and 82b of Part VI of Form 990. They ask 82 a Did the organization receive donated services or the use of materials, equipment, or facilities at no charge or at substantially less than fair rental value? 82 b Value of donated services or use of materials, equipment, or facilities. (Do NOT include this amount as revenue in Part I or as an expense in Part II. See instructions for reporting in Part III.) Our organization is an all-volunteer group, with countless hours of volunteer effort both in the US and abroad. All of us use our own computers, printers, digital cameras, telephones, and most of us pay our own airfares to visit overseas communities that we work with. But we haven't done any accounting for all this. What do you all recommend to clients about how to fill out 82 a and b? Chip Watkins of the law firm Webster, Chamberlain & Bean in Washington, DC, replied: Welcome Back, Harriet Bograd! For those of you who are newer to this listserv, Harriet is one of our founding members. Line 82 is optional, unlike the similar rules in GAAP, under which the NPO is required to value certain essential donated services. If you have some reasonable way to account for the services, etc., then by all meansdo it. The advantage is that some people will be motivated to give money or their own time, skills, and experience to organizations that they see are already the recipients of substantial volunteer services. I don't think I've ever had a client ask about completing Line 82. I suspect that most of those who complete Line 82 make a guesstimate, and let it go at that. I've never paid much attention to it, because an inaccurate answer cannot be penalized. And Mark Weinberg, of Weinberg & Jacobs, LLP in Rockville, MD, added: This is a REALLY important line on the 990 IMO. When IRS audits and you are trying to establish the predominance of your charitable purpose, a history of big numbers backed up by rational, contemporaneous records, goes a long way toward making your point. Of course, many charitable or educational activities generate little or no volunteer service (mass media education on important issues comes to mind as does some behavior modification work), but if you have it, flaunt it; it voodn't hoit. I encourage clients who utilize this resource to reflect it on the 990. Putnam Barber, of Idealist.Org, added this note in August of 2008: Starting in 2009, nonprofits will file a different version of Form 990 with the IRS each year. On the longer version of the form, used by larger nonprofits, more information about the contributions of volunteers is requested; completing these new items correctly will require additional record-keeping throughout the reporting year. There is more information about Form 990 in the Nonprofit FAQ at http://www.idealist.org/if/i/en/faq/57-95/62-42 Posted 3/31/07; revised 8/17/08 -- PB