How do people start non profit corporations as members of the board of directors and end up making all the $?
vsuzyq96 asked:
I have always wondered how people who claim to be “non profit” say they are just that, yet on the side they say they’re the “owner”, and they make all the money off the so called non profit. When you incorporate as part of the member of the board of directors, aren’t you forbidden from being compensated for being on the board? How does all that work?
non profit
I work at a non-profit. Our board members don’t make anything but our executive director makes about 115k a year. It’s ridiculous and doesn’t make sense. All I know is that the board members are either retired, loaded or both. The Exec. Dir. has the final word but they run it through the board first.
In response to the poster who had an issue with my answer. You are right to an extent, but the reason I say it’s ridiculous is because while she makes 115k plus a year, her employees make 30,000 max a year. We are all educated and have responsabilities as well and I don’t think that we are properly compensated. I mean, it should equal out a little better, don’t you think?
Create a video blog…instantly.
No you are not forbidden from being compensated. It’s part of administrative fees and you can pay yourself a salary. They don’t work for free! Technically, it means the company isn’t making a massive profit. To clarify further, I recommend just reading this generic insert on Wikipedia:
non profit
Thanks for the question.
In the nonprofits I have worked for, yes, the board members are wealthy but this is from their jobs — the board member duties are volunteer work for them.
Many nonprofit board members were wealthy before the got on the board of the charity. They were very supportive to the cause and gave large donations. They did not become wealthy by serving on a nonprofit board — they are on the board because THEY GAVE to the charity, not the other way around.
Sometimes these board members are not only wealthy but also have a personal commitment for the cause. I worked with many awesome dynamic women on a fund
providing local women with free mammograms.
These particular board members were also breat cancer survivors.
Some large donors increase their service to the nonprofit organization by serving on the board, which involves being a cheerleader and ambassador for the charity and other business leaders. They get other people to donate too, help raise community awareness, etc.
For example, you know how you see Avon sponsor breast-cancer awareness walks? And other corporations sponsor other charities? Many times board members are the ones who connect these big companies with the nonprofit charities.
I know this answer all of your questions, but I tried to answer some of them. =)
Website content
The board should not be making money from the organization. One’s time for serving on the board should not be in return for pay — in fact, most board members provide some of the funding for an organization. Whether it’s against the law or not, it’s the industry standard that nonprofit board members are NOT paid, and your email is a perfect illustration of why paying board members at nonprofit organizations is a very bad idea, from a PR standpoint.
However, I take issue with the other poster who said that her Executive Director makes more than 100K a year and that she thinks that’s unreasonable. The ED is not a board member — he or she is the head of the organization. Salaries are based on the responsibilities a person has and the academic and work experience required of a person in a particular position. Without knowing that the organization is, what work it does, and what responsibilities the ED has, you can’t pass judgment on that salary as being unreasonable.