Homebrewers Association | AHA Forum

General Category => Homebrew Clubs => Topic started by: mellodybrew on November 05, 2014, 10:27:20 PM

Title: Paid positions for club board members
Post by: mellodybrew on November 05, 2014, 10:27:20 PM
I have a unique question. Our club has been running very large and successful events. We do food competitions in conjunction with homebrew competitions that the general public is involved in and where we get corporate sponsors to donate funds or in kind to help make the events profitable for the club. We have reached a point where one of our events draws over 1,000 people and another over 200. We make decent money at these events, give large portions to charity with some funds left over for club purposes - holding meetings, buying club shared equipment, etc. The issue has risen that the members who help with these events spend a large amount of time to prepare and run them and some have raised the question of receiving compensation for their time. Do any other clubs do this? What issues do you foresee if we were to do this?
Title: Re: Paid positions for club board members
Post by: kramerog on November 05, 2014, 10:52:17 PM
If by compensation you mean money then the club probably has employees or contractors rather than volunteers especially because the subject line is "paid positions for club board members."  This opens a can of worms ....  I'm not sure where the dividing line between employees or contractors and volunteers is, but I see plenty of clubs giving free or reduced entries and fee waivers to volunteers.
Title: Re: Paid positions for club board members
Post by: duboman on November 05, 2014, 11:14:52 PM
This to me seems like paying people like employees which opens the club up to payroll, taxes and other issues, I'd consult a CPA to discuss.
Title: Re: Paid positions for club board members
Post by: Jimmy K on November 06, 2014, 01:26:39 AM
Basically, AHA does all this, but I don't know of any other clubs.

I agree that consulting a CPA would be best. You could pay a stipend - a flat rate for a year's service. Perhaps that would also let the club pay them as an independent contractor and avoid payroll taxes, etc. Maybe another option would be to "pay" with gift cards to the LHBS.
Title: Re: Paid positions for club board members
Post by: reverseapachemaster on November 06, 2014, 04:12:47 PM
This is a land mine for any nonprofit. When you make payments to a volunteer by way of something other than a small gesture, like a t-shirt, you have to report the payments as income to the IRS. That is true even if it is a gift card, gas reimbursement, or a cash payment. If you exceed the limits on payments to volunteers you can quickly turn them into employees. That also brings along obligations to carry unemployment insurance and workers comp coverage, pay employment taxes, keep payroll records consistent with DOL and IRS regulations and worst of all, it opens the organization up to legal liability for the volunteer-turned-employee just like any other employer's exposure. You can't just call them independent contractors and get out of all of that.

Any payments made to the volunteers opens up the organization to having to defend potential claims that the volunteer was an employee and should be able to assert the same rights an employee would have against an employer. Prevailing against the volunteer is still going to be expensive and time consuming. Although your club's volunteers may have their interests aligned with the club today, if one of them gets injured working on behalf of the club or has their car damaged then the club could find itself on the opposing side of the injured person's insurer trying to recover for an employment-related injury.

Don't even get near this idea without working with a CPA and an employment lawyer to draft a policy that best protects the club from liability on all of these fronts.
Title: Re: Paid positions for club board members
Post by: Bruce B on December 14, 2014, 10:19:09 PM
It's just a bad idea and it can get out of control quickly.  Our club runs 3 to 4 competitions a year, a beer festival, monthly meetings, a club picnic, a club holiday party, participate in 3 to 4 beer festivals ran by others, run buses to other beer festivals, put on educational events, maintain a scholarship program, etc.  Depending on how much we do a year our total revenue has been between $55K to $80K.  That might not be as much as what your club is drawing in, but it's still a sizable amount.  Our officer's don't have to pay their annual membership dues ($20 a year) but that's it.  Everyone else pays their membership dues, entrance fees, admission, etc.