Conflict of interest in a non-profit?

Question

Can you tell me if this situation involves a conflict of interest, or even something illegal? A person that I know operates a non-profit foundation, a 501(3)(c). It is indeed non-profit; if anything it is losing money. But this same person who is president of the board of directors, is also owner of another company, the for-profit company that owns the facilities. So basically he rents his property to the non-profit at a fair market rate.

Does this sound fishy? It sounds like this person has figured out a way to make a profit from his own non-profit organization. What do you think?

Answer 1

This is done all the time.  Most highly paid actors, entertainers etc. all have non profit organizations as a means to shelter income.  Yes, they all are unethical but not illegal.  Most "fans" don't realize this about their heros, politicians, and highly paid executives.  By the way, their is no such thing as a non profit organization (in name only) except the Salvation Army.  This non profit organization scam is legal per the I.R.S. will continue this way probably forever.  The Red Cross is probably the worst abuser of public funds followed by the United Way.  I am sorry to burst your altruistic bubble.