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Nonprofits: A Guide to Managing Volunteer Expenses

It's National Volunteer Week, and in honor of the millions of people who give their time to a good cause each year, we're chatting about the business side of managing volunteers. Nonprofits vary greatly in ratio of paid staff to volunteers. The responsibilities of volunteers differ across organizations: some might donate their time for a one-day event while others are there, week after week, doing behind-the-scenes operations work. Undoubtedly, nonprofits that rely heavily on volunteers run into many of the same problems when those volunteers suddenly need to make a purchase on behalf of the organization.

We've come up with some tips to easily manage those tricky expenses:

1. Petty Cash Petty cash is simple but can have its downfalls -- it needs to be distributed, tracked and accounted for. A finance manager or director needs to be on hand to distribute any cash to volunteers, and follow up on collecting change and a receipt. In addition, there is an inherent risk of carrying cash, particularly depending on the amount. That being said, assuming the amount of cash is small, it's a fairly low risk method of providing quick funds to volunteers.

2. Expense Report/Reimbursement Depending on the expense, sometimes volunteers may need to buy something on behalf of the organization using their own funds, and ask for reimbursement. In this instance, the burden falls not only on the volunteer, who may or may not wish to use their own money and wait to be reimbursed, but on a finance manager who then has to process an expense report and issue a reimbursement check. This option might be best for purchases greater than what should be provided in petty cash, but not so high it warrants a credit card.

3. Corporate Card Volunteers shouldn't be asked to front the money toward a large purchase for a nonprofit organization. In that case, a company credit card should be used. This isn't without risk-- you have to trust the volunteer won't make any additional purchases. As this person isn't an employee of the organization, there is more liability. But you also don't risk taking advantage of a volunteer's generosity by asking him or her to make a large purchase for the organization. You want to cultivate all that goodwill, so they will be back to volunteer for your organization!

4. PEX Card Another option for volunteer expenses is PEX Card. As a corporate credit card alternative, you essentially eliminate the three options above. There is no petty cash involved, no reimbursement checks, or expense reports. A nonprofit organization would issue generic cards to volunteers or temporary workers, fund the cards to meet their expense needs, and collect receipts. It's that simple!

You can check out the detail on what PEX Card does for nonprofits.

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