Yes, but with important considerations. It is common for a CEO or executive director to be a board member. Board directors perform a “service” but aren’t employees. In most states it’s legal for paid staff to serve on governing boards. But it’s not considered good practice, since it’s a conflict of interest.
Your by-laws should describe a process by which a member can be removed by vote. For example, a member can be removed by a two-thirds vote at a regularly scheduled meeting.
In many states, nonprofit members can be appointed by third parties. Some organizations provide for reserved powers to balance competing interests.
When you are paid a nonprofit salary, you are less likely to burn out. An individual can serve as both President and CEO but most laws require one person be designated President.
Board compensation can lead to IRS audits. Most members are unpaid volunteers. Common 501(c)(3) rules are: not a paid employee, committed to the mission, volunteer time monthly.
There are no laws barring elected officials from nonprofit boards but “conflict of interest” provisions may affect things.
On working boards, members participate in programs, fundraising and administration. Whether the board employs staff depends on the nonprofit’s size.
Board terms typically last two to five years. Governance differs from management.
People join because their skills are needed and they can effect change. The best approach depends on the mission and founders’ goals.
The board oversees the CEO but a chair isn’t above other directors. Effective boards balance this relationship.
Yes, non-profit founders can receive a salary. The salary must be reasonable and determined by the board of directors, often based on the founder’s responsibilities, experience, and the organization’s finances.
For nonprofit visionaries dedicating themselves full-time to their cause, they may wonder, “how much can I pay myself?” The law only requires reasonable compensation. Even if the planned salary is reasonable, donors may have subjective opinions on nonprofit pay.
Non-profit founders hold salaried positions with annual pay and benefits. The board sets this compensation considering qualifications, duties and nonprofit resources. Performance incentives tied to goals like securing a grant may provide additional pay.
You can make decent money starting and running a non-profit while making a positive impact.
What is a reasonable nonprofit salary? A $10 million nonprofit CEO might earn $150,000-$160,000. Many factors determine the final compensation.
To pay yourself from a nonprofit, become an officer within the company at a salary you set. But compensation can’t be unlimited. IRS rules penalize excessive pay.
The founders of a nonprofit are not permitted to make a profit or benefit from the net earnings of the organization. However, founders can make money by receiving reasonable compensation from the nonprofit for work performed.
Nonprofits cannot pay salaries until funds are available.
What is reasonable nonprofit pay? Factors like budget, founder duties, nonprofit growth potential and IRS rules determine nonprofit salaries.
Excessive nonprofit pay can draw public criticism. Groups like Charity Navigators rate nonprofits on funds spent on salaries versus programs. Nonprofits spending less than a third on programs get poor ratings.
Starting a nonprofit requires vision and planning. The founder must determine the nonprofit’s future direction and mission. As times change, the nonprofit should evolve to continually benefit those it serves.