Developing an Effective Policy for Reimbursing Volunteer Travel and Other Expenses

By Jean Callan

Nonprofits greatly value the contributions of volunteers, and in recognition of this, it's essential to establish a fair and transparent policy for reimbursing travel and other expenses related to the organization’s purpose. While it's ideal to pay for expenses directly, circumstances often require a volunteer to cover costs initially and seek reimbursement later. This document outlines a policy aimed at ensuring these reimbursements are managed efficiently and in compliance with Internal Revenue Service (IRS) guidelines.

Types of Reimbursable Expenses

Volunteers may incur various expenses that are essential for the organization's work. These can include:

• Mileage
• Hotel/Lodging
• Costs related to events or fundraisers
• Dining/meals
• Other travel expenses, including tips
• Program-related supplies and goods

For example, a volunteer driving to a fundraising event would claim mileage, while another purchasing supplies for a program would seek reimbursement for those goods.

Documentation Requirements

Adequate records are vital for reimbursement. For instance:

• For meals: A receipt listing the restaurant name, date, items ordered, and tip.
• For lodging: A receipt showing the hotel name, stay dates, and itemized charges.
• For event-related expenses: A receipt or contract indicating the date, purpose, and amount.
• For mileage: A log detailing the date, destination, number of miles, and trip purpose.

Photocopies of credit card transactions are not sufficient. Documentation should be clear and specific to ensure compliance and transparency.

Reimbursement Procedure

The policy should include:

• A requirement for sufficient documentation, with examples provided.
• A stipulation that expenses have a clear business purpose.
• A deadline for submitting reimbursement requests, such as within 60 days of incurring the expense or through a monthly expense report.
• A procedure for returning excess funds provided upfront, aligned with IRS guidelines (within 120 days).

Reimbursement Form

An accessible online reimbursement form should include:

• Description of the expense or item purchased.
• Date of purchase/expense.
• Purchase amount or mileage log details.
• Reason for purchase.
• Connection to the nonprofit mission.
• Beneficiary details (individuals or programs).
• A section for review and authorization by a board member or finance personnel, including a place for signatures and dates.

Mileage Reimbursement

The IRS stipulates specific rates for mileage reimbursement. In 2024, these are $0.67 per mile for business purposes and $0.14 per mile for charity work. Board members use the business rate, while other volunteers use the charity rate. These rates are subject to annual updates.

Conclusion

Establishing a clear reimbursement policy helps maintain transparency and trust among staff, board members, and volunteers. It sets clear expectations, ensures timely reporting of expenses, and aids finance and accounting teams in managing and validating expenditures according to the organization’s policies and goals.