Do you actually take the salary and donate it, or do you just claim a lower salary and call some hours ‘pro-bono’? Obviously the latter is more tax-efficient.
It is actual salary. Since I’m an exempt, salaried employee, it’s not clear that I could claim pro bono hours, and unless that was very clearly written into my hire letter I feel that doing things that way wouldn’t be enough in line with the spirit of the pledge. It’s possible we could get the tax benefits and deal with my qualms in the future.
I didn’t receive salary I was owed before the org was officially formed (waiting for the appropriate structures to pay myself with a W2), all of which is still an account payable to me, and I’ve foregone additional salary when the org couldn’t afford it, which is owed to me as backpay. In order to donate any of the money that’s owed to me, we have to process it through payroll and pay payroll tax on it.
At this point, I have many years of 10% donations in backpay. Some of it I’m reserving the right to still claim one day. But I’m processing some as a donation for my year-end giving (when I do the bulk of my giving) this year.
The pledge, for me, is not just about donating the money but about the spiritual hygiene parting with the money and affirming my priorities, so it’s very important to me to actually give money I was in possession of. It could work for hours but I’d need to have that same knowledge of making the sacrifice as it was happening. I’m not saying this is the correct or necessary way to view the pledge and I approve of other people using the pledge in the way that best helps them to stay in line with their altruistic values.
I’m trying to understand… what does “exempt” mean in the phrase “exempt, salaried employee”?
Do you mean that your salary is part of the expenses of a tax-exempt nonprofit, so people who donate to PauseAI (partly to pay your salary) can deduct this from their taxes if they itemize their returns? And I’m trying to understand the connection between this and the idea of claiming pro-bono hours? Thanks!
Oh sorry, “exempt employee” is a legal term, referring to being exempt from limits on hours, overtime, mandatory lunch breaks, etc. What I meant was I’m not an hourly employee.
Do you actually take the salary and donate it, or do you just claim a lower salary and call some hours ‘pro-bono’? Obviously the latter is more tax-efficient.
It is actual salary. Since I’m an exempt, salaried employee, it’s not clear that I could claim pro bono hours, and unless that was very clearly written into my hire letter I feel that doing things that way wouldn’t be enough in line with the spirit of the pledge. It’s possible we could get the tax benefits and deal with my qualms in the future.
I didn’t receive salary I was owed before the org was officially formed (waiting for the appropriate structures to pay myself with a W2), all of which is still an account payable to me, and I’ve foregone additional salary when the org couldn’t afford it, which is owed to me as backpay. In order to donate any of the money that’s owed to me, we have to process it through payroll and pay payroll tax on it.
At this point, I have many years of 10% donations in backpay. Some of it I’m reserving the right to still claim one day. But I’m processing some as a donation for my year-end giving (when I do the bulk of my giving) this year.
The pledge, for me, is not just about donating the money but about the spiritual hygiene parting with the money and affirming my priorities, so it’s very important to me to actually give money I was in possession of. It could work for hours but I’d need to have that same knowledge of making the sacrifice as it was happening. I’m not saying this is the correct or necessary way to view the pledge and I approve of other people using the pledge in the way that best helps them to stay in line with their altruistic values.
I’m trying to understand… what does “exempt” mean in the phrase “exempt, salaried employee”?
Do you mean that your salary is part of the expenses of a tax-exempt nonprofit, so people who donate to PauseAI (partly to pay your salary) can deduct this from their taxes if they itemize their returns? And I’m trying to understand the connection between this and the idea of claiming pro-bono hours? Thanks!
Oh sorry, “exempt employee” is a legal term, referring to being exempt from limits on hours, overtime, mandatory lunch breaks, etc. What I meant was I’m not an hourly employee.
https://www.indeed.com/hire/c/info/exempt-vs-non-exempt-employee