Employee's at a Non-Profit Organization (501 C 3)?

Question

Hi everyone,

I have been serving as the chairman of the board and president for a non-profit organization, which is a 501 c 3. Our Executive Director recently quite, leaving the position open. I was asked if I wanted the position, and I would like to have it... However, can a member of the board of the directors for a NP work as an employee for the same Non-Profit and make a paycheck?

I know Board Members are not allowed to receive compensation, under 501 (c) 3 law, but I'm not sure if this is just if they serve on the board or not?

Any suggestions

Answer 1

You would be allowed to receive compensation as executive director, even if sitting on the board.  In my experience it's not unusual for at least 1 or 2 of the everyday executives to sit on a NP's board.

It'd probably be wise for the board to form a compensation committee (not including yourself as a member) to approve your salary.  And of course your salary would have to be reasonable.