Last updated on: May 20, 2025
Running a nonprofit means wearing many hats and often footing the bill for mission-driven work until funding catches up. But how do you know which expenses count as organizational, and which are considered personal? Whether you’re a founder working from your living room, a board member hosting strategy meeting over lunch, or a staffer tracking mileage to a community event, understanding reimbursable nonprofit expenses is key to staying compliant and financially healthy.
At BryteBridge, we get this question all the time. So, here’s a clear breakdown to help you confidently navigate what can (and should) be treated as a legitimate organizational expense. Knowing what qualifies as nonprofit reimbursable expenses can help clarify this.
What Is Considered a Nonprofit Organizational Expense?
A nonprofit expense is any cost that is necessary, reasonable, and directly tied to your mission and operations. These costs can be paid directly by the organization or reimbursed to individuals who pay out-of-pocket on behalf of the nonprofit.
Common expense categories include:
Office & Communication Costs
- Internet & Cellphone: If used for nonprofit work, a portion can be reimbursed. Keep in mind, only the percentage used for organizational activities should be claimed.
- Software & Supplies: From accounting software to printer paper, if it supports the work of your nonprofit, it’s typically allowable.
Travel & Transportation
- Mileage & Gas: If you use a personal vehicle for nonprofit-related errands or meetings, keep a mileage log. You can reimburse at the IRS standard mileage rate as part of nonprofit reimbursable expenses.
- Lodging & Airfare: Conference attendance, site visits, or collaborative events are often covered as long as they serve a clear organizational purpose.
Meals & Meeting Costs
- Board Meeting Meals: Yes, meals served during official board meetings are reimbursable. Keep detailed records of who attended and the agenda.
- Donor or Stakeholder Meals: These are allowable when there’s a legitimate business purpose tied to fundraising or partnership development, qualifying as reimbursable expenses.
Home Office & Facility Use
- Rent & Utilities: If your home serves as your nonprofit’s base of operations, you may be able to deduct or be reimbursed for a portion of your rent and utilities. The key is having a dedicated space used exclusively for nonprofit work, making them part of reimbursable non-profit expenses.
- Home Office Deduction: This applies only if you meet the IRS’s strict “regular and exclusive use” test.
Professional Services & Development
- Legal, Accounting, Marketing Services: These are standard operating expenses and should be documented with invoices or contracts.
- Conferences & Training: If it helps you or your team better serve the mission, it’s a smart and legitimate expense.
Reimbursement vs. Direct Payment
Here’s the difference:
- Reimbursed Expenses are paid upfront by a board member, volunteer, or staff person and later reimbursed by the nonprofit.
- Organizational Expenses are paid directly from the nonprofit’s bank account or credit card.
To avoid IRS trouble, make sure your nonprofit includes clear guidelines for reimbursable nonprofit expenses:
- Has a written expense reimbursement policy
- Requires receipts and documentation
- Enforces timely submissions (ideally within 30 days)
- Involves board oversight for unusual or high-ticket reimbursements
Keep It Compliant, Keep It Clean
We always recommend:
- Avoiding commingled expenses: Never charge personal expenses to the nonprofit account.
- Maintaining clear records: Receipts, mileage logs, and meeting notes are your best friends.
- Following your bylaws: Make sure reimbursements align with your approved policies and IRS guidelines.
Need Help Setting This Up?
Understanding nonprofit reimbursable expenses is just one piece of building a strong, transparent organization. At BryteBridge, we help emerging nonprofits put the right systems in place, from budgeting and compliance to board governance and IRS reporting.
For more information, join BryteBridge Connect Membership for Live Bootcamps, Webinars, and classes. Speak to a BryteBridge Consultant today by calling 877-857-9002.
