Working for the Nonprofit…Or Not

Every contract I sign with clients has clear and specific detailed information regarding my status and relationship with the nonprofits I work with. All of them say the same thing---that I am an independent contractor, I am not an employee, and there are no benefits that align with the work that I do. I certainly agree with that in totality.

What I’m seeing in the industry is more and more independent contractors serving within nonprofits. In my case, it doesn’t bring up major issues because of the work that I do. But if you’re an independent contractor who’s doing direct grant work for an organization or an independent contractor who is running a special event for a nonprofit, it gets more dicey. In fact, the Nonprofit Times had an article indicating this issue is becoming more and more nebulous with many dark corners.

To be an independent contractor, the organization for which you work cannot tell you when to work or how to get the work done. Basically, in very simplistic terms, they give you a duty to complete, and it’s up to you as the independent contractor to get it done when and how you think is best. There can be a deadline, but they can’t encumber an independent contractor with meeting times, lots of in-office meetings, time availability, etc. The key term here is independent.

The IRS is catching on. Specifically, section 530 of the tax code deals with this idea of a Safe Harbor rule that protects an organization regarding employment issues and taxes. However, there are certain things an organization has to do---for example, they cannot dictate too many work terms of the independent contractor.

All this is to say that as we see an increase in independent contractors working inside or with organizations, it’s important for nonprofit leaders to recognize their responsibilities, and more importantly the limitations when it comes to an independent contractor partnership.