Business & Work

Worried about doing this on your own?  You may be able to get free legal help.

Paying a board of directors

It is not against the law to pay nonprofit officers and directors, but it is uncommon. A corporation's bylaws outline whether directors of a company receive compensation. A new nonprofit organization should try to use volunteers. Money should be used for the organization's mission. It should not be used to pay the directors. If directors of a nonprofit receive compensation, there may be tax implications. In this case, you should talk to a lawyer.

The IRS worries about overpaying the board of directors and employees of nonprofits. It is better not to pay directors. Directors can be reimbursed for carrying out their duties as a director, for example, car mileage. The executive director and other employees may be paid reasonable compensation.

Last full review by a subject matter expert
May 31, 2023
Last revised by staff
May 31, 2023

Comments & Ratings

Rate
No votes yet

Only logged-in users can post comments.  Please log in or register if you want to leave a comment.  We do our best to reply to each comment. We can't give legal advice in the comments, so if you have a question or need legal help, please go to Get Legal Help.

Worried about doing this on your own?  You may be able to get free legal help.