Stipends: Overview, definition, and example
What are stipends?
A stipend is a fixed, regular payment or allowance given to individuals to cover specific expenses or provide financial support for a particular activity, such as education, research, or internships. Unlike a salary, which is typically paid for work performed, stipends are often provided as a form of financial assistance, particularly when the recipient is not expected to work full-time or perform traditional duties. Stipends are commonly offered to students, interns, fellows, or volunteers to help cover living or educational expenses.
For example, a graduate student conducting research might receive a stipend to help cover their living expenses while they focus on their academic work.
Why are stipends important?
Stipends are important because they help support individuals who may be engaged in activities that do not provide a salary but require financial support to cover their living costs. They are commonly used in educational, research, or volunteer programs where individuals contribute to an organization’s objectives without a traditional wage.
For businesses, offering stipends can be a cost-effective way to attract talent, such as interns or fellows, while helping them gain experience without the financial burden. For individuals, stipends provide a means to engage in valuable work or educational activities without needing to find additional employment to support themselves.
Understanding stipends through an example
Imagine a student who is awarded a research fellowship at a university. The fellowship offers a stipend to cover the student's living expenses while they conduct research in a particular field of study. The student receives the stipend on a monthly basis for the duration of the fellowship, allowing them to focus entirely on their research without needing to work a part-time job.
In another example, a non-profit organization offers a stipend to its volunteers who help run community programs. The stipend helps cover the volunteers’ transportation costs and some living expenses, making it easier for them to continue their volunteer work without incurring financial hardship.
An example of a stipend clause
Here’s how a stipend clause might look in an agreement:
“The Recipient will receive a stipend of $1,500 per month for the duration of the Internship Program. The stipend is provided to cover living and travel expenses and is not intended as a salary or compensation for services rendered.”
Conclusion
Stipends provide financial support for individuals who are engaged in educational, research, or volunteer activities, helping them focus on their work without the added concern of financial burdens. For organizations, offering stipends can be a way to attract and support talent, while for individuals, stipends offer an opportunity to gain experience or pursue academic endeavors without needing a traditional income. Clear terms and agreements regarding stipends help ensure that both parties understand their expectations and obligations.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.