It is very important that every student participate in VIP for a grade (A,B,..,F). The Pass/Fail option is very destructive to team dynamics as some students will try to get by with the minimum work required to pass. This can be frustrating to students who want to make rapid progress in order to get a high letter grade.
Do not allow auditors or volunteers to participate in VIP teams. In our experience, at least 95% of them disappear after the first third or first half of the semester, often leaving some critical task unfinished or in an unknown state.
There is one exception to this rule. Students who are paid register for a “zero” credit course. In our registrar’s system, it shows up as a 1-credit audit course.