Posted by Randy LeGrant on Tue, Oct 13, 2009
Yesterday I reposted from various Blog sites on deducting your voluntourism program from your taxes. The question was, "Tax Deductibility and Voluntourism-Should It Stay Or Should It Go." Today I'm making a case against tax deductibility and voluntourism in my own Blog. It Should Go. At least for now.
I don't want to rant, so I'm providing you 2 sources with independent links to use to evaluate on your own where you are volunteering and how you are spending your money. Because if anyone is telling you that you can deduct the program fees or your trip because you're volunteering, they are leading you down the wrong path and setting you up for an unhappy financial outcome, should you be audited by the IRS.
I went to several non-profit web sites to see how this is handled. I found this quote from one website: “100% of the payments towards the program fee are deductible for federal income tax purposes.” Another one has this on their home page: "All your program costs are tax deductible**"
What I want to do now is give our readers some actionable and independent tips. Here you go:
1. PLEASE if you don’t do anything 
else, download IRS Publication 526, Charitable Contributions at http://www.irs.gov. That is your guide because if and when you are audited, and this deduction comes up, the IRS will follow, to the letter, this publication and will assume you have read it. Keep in mind the expenses must be directly related to the volunteers’ work, and incurred only because of that work. The expenses can’t be personal, for family, or for living items or activities such as meals. Volunteers must keep reliable written records of the expenses. Most importantly, The volunteer cannot gain significant personal pleasure, recreation, or vacation from the travel. And there are total hours you must be working, etc. Without good records and receipts, you'll pay the money back.
2. Next do your homework. Download Form 990 for each non-profit volunteer program provider you have an interest in. Any non-profit who takes your money should display a link to their Form 990 which tells you how much money they make, how much money they spend, who is on the Board and their relationship to one another along with other interesting tid bits required by the IRS. If you pay any money to any non-profit and you have not read their Form 990 you have thrown your money out on the street.
Because some non-profits will not want you to see their Form 990, they won't make it available on their website. So here is a link you can use. Click on this link below and type in the name of the organization you want to volunteer with and download their most recent Form 990. Their expenses are there, salaries, benefits, what they spend on programs abroad, Board Members and any compensation, etc. Look at their income (your money) and then total up what they spend on the projects. Then ask them where the rest of the money went. They are a public charity afterall. Find them all right here:
Foundation Center Form 990 Finder
Here at GeoVisions we think it’s distasteful to deduct your trip. At a time when our Government is Trillions of dollars in debt, and with rising unemployment, asking the Government to pay for your trip abroad is unthinkable.
For anyone to spend their hard-earned money and their precious time volunteering to make life better for someone else and then at the end of the calendar year hold their hand out to our government and expect the government to reimburse them for volunteering is unbelievable to me. It is the height of hypocrisy and the very definition of narcissism. To think that much of yourself that you offer to volunteer and then expect money back from the government because of your offer to volunteer is simply an act that reverses the very definition of volunteering.
If I donate $500 to your charity and then deduct that $500 on my taxes, I didn’t donate to you. I loaned you $500 until the government repays me. How is that volunteering or donating? It isn’t. You’re not a volunteer. You’re working because you’re getting paid. Not there on the spot. But you’re deducting what you paid “to volunteer” and you’re getting a financial consideration from Uncle Sam. You got paid. You didn’t volunteer. Even on my most generous day you put yourself out on loan.
In the end, GeoVisions made a conscious choice to be a for-profit company and not a 501 c 3 charity. We certainly had a choice. We provide great opportunities for people. And for host communities. And I am so proud of each and every volunteer that comes through our doors. THEY CANNOT DEDUCT A DIME. They are truly volunteering their money, their time and their talents. They are the true heroes that make the world a better place.
Posted by Randy LeGrant on Mon, Oct 12, 2009
Industry watch person and consultant, Alexia Nestora of Lasso Communications posted a blog post by Journey Etc. last week about declaring a tax deduction for a volunteer vacation.
Especially now, with the economy still bad and unemployment still rising, it is a valid debate. I hope you'll join in. I want to thank Alexia for putting up the original post from Journey Etc. on her own site and for keeping the debate alive. And thanks to Michele Gran for making certain Global Volunteers is the model 501(c)(3) and posting not only IRS Guidelines but for having a strong policy and ethic on how hard you actually have to work to honestly and legally declare a deduction for volunteering abroad. I wish the others were like Global Volunteers.
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From Voluntourism Gal: Notes on the Voluntourism Industry
The debate has always been around, should volunteer vacations be tax deductible? Does the mere word ‘vacation’ being used in marketing take away from the level of service that volunteers do in country? Or is the deduction in fact a marketing tool?
Journey Etc wrote an article on this topic addressed at travelers, what do you think about it? Let’s start the debate again.
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Voluntourism – A Vacation with Tax Benefits
You probably know that business travelers can often deduct all or a portion of their travel, even if they are having some fun. But did you know that you can also get a tax benefit from your vacation? You can if you are willing to do a bit of work as a volunteer with a non-profit organization.
“Voluntourism” is becoming a popular option for travelers that want to make the most of their vacation. By volunteering with a non-profit organization a person can travel to almost any global destination, experience the culture of an area in a whole new way, and have a sense of purpose and of doing good with their vacation time. And then to top it off, some or all of their vacation expenses can be deducted on their income tax returns.
To get the tax deduction on your US Return you must volunteer with a US non-profit corporation. Habitat for Humanity is one organization that has volunteer opportunities both local and abroad. You could also contact an organization that specializes in voluntourism such as Cross Cultural Solutions in New York or Global Volunteers which is based out of Minnesota.
There are a number of factors that determine if you can deduct some or all of your travel expenses. In general the amount deductible will depend upon how much time you spend doing strictly volunteer activities, versus how much time you spend doing strictly vacation activities.
Whatever your skills or talents, there is a volunteer opportunity for you. You can help children and adults with their English. You can provide medical services, or you could help build a home. You can work, with children, seniors, teens and adults.
When working with a volunteer agency expect to pay your own airfare, plus a program fee that will generally include lodging and meals. Prepare to be flexible and open to new experiences. Do not expect classy hotels and fine dining. To save money volunteers are often housed with local families or budget hotels and eat the local food.
If you want a vacation with a purpose, one where you get to really know the local people and culture, and one that comes with a tax benefit, consider voluntourism. You’ll be glad you did!
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Michele Gran Says:
October 4th, 2009 at 3:23 am
Thanks so much for the mention! I’d like to make one important correction to your article regarding tax deductions for U.S. taxpayers.
In fact, the IRS has very strict requirements for volunteers to average 8 hours per day on the volunteer work project, and that any “tourism” added to the service program may void the tax deduction. (That’s why we eschew the term “voluntourism”) For over 25 years, Global Volunteers has adhered to these requirements, and offers only full-day work projects, while advising that any “add-on” travel will require an opinion by a tax attorney regarding the tax deduction.
Our volunteers have never been challenged by the IRS on this policy. You can read our guidelines here: http://www.globalvolunteers.org/faqs/faq9.asp
Thanks again for your interest in this important way to give while you learn about another culture!