Charity work
2shanda (136 points) | Thu, 2007-09-20 15:31I have an ethics question:
When I was in design school, I did thousands of dollars in free work for a non-profit organization who helps network women in the film industry. I created a new identity, invitations, programs, ads, flyers and more.
Now that I am out of school, I am very busy working full time and running a successful freelance business on the side. The president of the non-profit emailed me today requesting more work, (no doubt for free.) She needs to tweak the logo I did, make a banner and some invitations.
Since I originally created the materials, do you think I am obligated to continue to do free work? Is it ethical to tell her I have to start charging her? (I do have a reduced non-profit rate.) Or should I just avoid the situation and not accept the work?
I am so busy I just don't have the time to take on free work, considering I have already done so much for this particular client.
studio shanda
Commenting on this Forum topic is closed.
First of all, if you don't have the time, then you don't have the time.
Secondly, there will never be a shortage of people wanting (and/or needing) you to work for free "for the cause."
Thirdly, just because they are not-for-profit doesn't mean that they can't pay you. I have a few not-for-profits that I do work for and they get charged the same rate as anyone else.
That said, here's how I "donate" my time and services so I can take the charitable deduction at tax time. The IRS will NOT allow you to deduct billable time as a deduction. They only allow fair-market value of donated goods or cash as a deduction.
Before I take any pro bono work, I get an agreement in writing that pretty much states that they will pay me my full rate. Once I deposit that check into my account, I write them a check as a "donation" sometimes for the full amount that I received, sometimes minus a pre-decided rate for the work I did. So, it's a wash, BUT: It's fully-deductable and perfectly legal.
If the charity is not agreeable to do this, then I can not do the work, simply because I can't take the deduction otherwise.
This applies in the US, so check the rules where you live. Your situation may be different.
Hope this helps.
Terrell Thornhill
e-zign Design Group
I kicked around a similar idea a couple of years ago but ultimately decided the tax benefits of doing this weren't there.
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Situation 1: [Don't charge]
Taxable Income: $75,000
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Situaion 2: [Charge and donate back]
Taxable Income: $75,000 [+] 5,000 nonprofit income [-] 5,000 charity deduction [=] 75,000 taxable income.
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Either way you still end up with the same taxable income at the end of the year and I don't see any benefit of doing this. What am I missing?
according to the IRS, (using your figures) the $5,000 you can claim as a cash donation, to a (government-recognized) not-for-profit, thusly, subtracting the same 5,000 from your taxable income.
Terrell Thornhill
e-zign Design Group
I think we are on the same page but I wanted to clarify the point for others.
You need to report the $5000 of additional income the non-profit paid you. This raises your taxable income $5,000 before you turn right around and deduct it back off as a cash donation.
As you indicated... it becomes a wash.
Note: For anything over $600 in a year businesses should be giving you a 1999-Misc for non-employee compenstation.
Technically, your method is probably a more 'accurate' form of accounting but if the income is filed correctly I don't see any personal gain for a business or individual on their taxes.
We are on the same page.
I mainly wanted to point out that the IRS doesn't view billable-time as a donation worth granting "deduction" status. And being in a profession where billable time is our main income generator, suggest a legal work-around.
Thanks for the clarification.
Terrell Thornhill
e-zign Design Group
I would have never thought of that. Thanks for your advice. I guess what I am really trying to figure out if it is ethical for my to START charging them now. If I were to get some compensation for this project now, I would be more than willing to work it into my schedule. But honestly, the warm fuzzy feeling I got from doing charity work with the client went away about $2000 ago. It's not like they are feeding starving children, they are a group of middle to upper class working women who are looking to advance their careers in the film industry.
studio shanda
Much of ethics has to do with both parties agreeing to the arrangement (and following whatever the law is governing the arrangement), but in business full-disclosure first is a must.
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Powerpoint is not a design application
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Dirt and Rust
It's really not an ethics questions as much as you feeling some guilt on wanting to change the agreement of your relationship.
Once free, doesn't mean they have that arrangement for life. You made it clear in your description that you no longer have time for free work. Just explain the change and ask for what you want. You may be surprised.
Rehearse your response on now needing to charge at your 'non-profit' rate since leaving school and call to notify them of the change. Meet the challenge head on and don't walk away from potential work. If they ultimately decide to go another direction that is their decision. You could offer your native files as one last act of kindness.
You're a woman. They helped launch your career by trusting you with pro bono work that enhanced your student portfolio while also advancing their cause both philosophically (women helping women) and materially (new logo et al.). Neither of you owes each other anything now. I should think, though, that they would be happy to pay you to do the work they now need. If not, then they need to re-evaluate the philosophy (again, women helping women) that appears to drive their mission.
Good luck!
Mara
for the input. I agree. I drafted a response to her. I have pasted the related portion below. Let me know what you think.
"I would love to continue to help you out with materials, but now that my situation has changed, my work load has as well. Like I said, besides working full time, I also have a long line of clients who have payed me in advance for design work. Right now, my first obligation is to them, since they have payed for work and I have a contract to them.
My time is extremely valuable right now, and if I want to continue to grow my business and make a profit to support my self, I need to be selective on what work I take on right now.
I would like to provide you with options however.
1. I can provide you with all of the native files I have already created so you can complete any projects in the future.
2. I can complete projects for you at my reduced non-profit hourly rate. I charge $55 an hour for standard client work, yet only charge $30 an hour for non-profits.
Please let me know what I can do for you."
studio shanda
I highly recommend talking with them on the phone about this mater.
Absolutely DO NOT send that letter! [It's cold and impersonal]
I took much of what was written as very condescending [my time, myself] and insulting. [I'm real busy and you're not that important] It almost seemed like a blackmail letter and I was left with a very negative reaction.
Remember: Everyone's time is valuable and everyone has to support themselves. It's not a good idea to slam that in their face. You do not need to justify your decision or go into great detail. If they are good people they will understand.
Talking on the phone will allow them to hear the inflection in your voice and regard you have for them and the relationship. It will also give them the chance to propose an alternate solution. [Right now it reads as two negative options]
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Instead, use a casual phone call notifying them you got the email.
"Hi Jean. I got your e-mail and wanted to follow up. How has everything been going since I last worked on these designs? blah, blah, blah.
[TRANSITION]
I loved working on this project and really value our relationship but since leaving school I'm no longer able to donate my time.
[PAUSE]
Stop talking and let them soak it all in... wait for their reaction.
[EN]
Listen to their reaction and respond either with your normal rate but because of your previous relationship your special non-profit rate or you can discuss how you can assist them by providing the native files to another designer. End on a positive and never burn bridges.
[/]Definitely don't charge anything less than your hourly rate, whether you charge or not. I always make a point of using a contract for every job, paid or not, and the client receives that invoice at the end so they know the value of the work. Then, down the road, if rights need to be transferred, I have a standard on which to base my rights transferral fee.
As for changing the ground rules with your non-profit client, don't expect a fight. Just tell them the situation succinctly (they don't care about your other clients) and what your scheduling and terms are going to be. It's just business. :)
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Powerpoint is not a design application
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Dirt and Rust
I hope you haven't sent that letter/e-mail. I agree that its tone is all wrong. It starts out a little defensive, then shifts to (as NRG pointed out) condescending. There's no need to go into a whole song and dance about how other people are paying you yadda yadda. Be the empowered woman they will respect: be candid. Say something on the order of, "It's wonderful to hear from you and I'm especially delighted that the work I did for you when I was a student has stood the test of time. Now that I'm a professional, I'd be proud to add you to my client list. Please let me know what you've budgeted for this work, including printing the banner etc., and I'll prepare a proposal for you." Thank them again for recognizing your ability when you needed to enhance your credibility as a designer, and compliment them on "walking the talk" when i t comes to helping professional women to advance in their careers.
That oughta do it. ;-)
Mara
Good point about "walking the talk", since of course it is a two way street.
www.alessandraandy.com
I do a mix of free and paid work.
Generally if I have an idea that I want to push and it works then I'll charge for the updates and roll out of the concept, some times they need an emergency job done last minute and there is no budget and I'll help them out if it's 5 minutes out of my day, but large jobs need paying for. End of.
A charity is like any other business and they need to be able and willing to pay for work done by contractors or they'll go bust like any other business.
www.jamnittygritty.com