if your a non-profit are you allowed to pay salaries to your staff and yourself?

Question

I'm starting a non-profit 501 c3 (educational after school care) and will need to hire staff. Can I pay my staff and myself for working at this facility as a non profit

Answer 1

As said already, Yes.
A non-profit still has revenues (money coming in from fees, sales, etc.) and expenses (salaries, rent, maintenance, etc.). But when Expenses are subtracted from Revenues what is left is zero.
But that is not totally true. Revenues can be greater than expenses but that extra money has to be put aside for reserves to cover expenses in time of a downturn in revenues.
You need to look for an accountant that understands non-profit accounting or read up on it.

Answer 2

1.) Yes, if you have the financial resources, you can pay the staff

2.) If you are a staff-person, you can be paid also. However, if you are a Board Member (ie one of the Incorporators), this complicates things a bit. The simplest thing for you to do is to recruit a Board of Directors and get hired as the Executive Director or CEO. You may lose some authority and control to the Board, but as an employee, you can receive a salary.

3.) In setting up the Board of Directors, try not to use immediate family members or individual with whom you have a close personal or financial relationship. This might create a "conflict of interest" and diminish their effectiveness as a board member and/or compromise the integrity of the organization to your funders and the general public.

4.) I would recommend that you put together a basic "business plan" for this endeavor to gain a better grasp on the human and financial resources required for this organization.

Answer 3

Yes, you can pay your staff and yourself. Nonprofits wouldn't be so prevalent if it was all volunteer!

Nonprofits actually can (and should) turn a profit. However, unlike in the for-profit sector, any revenue gained needs to be returned to the nonprofit corporation to further its mission. So, if you have an excess $200 (I'm using way small numbers here, just for examples sake), you can't use that $200 to give yourself a Christmas bonus or anything "frivolous." But, you can use it to provide extra of whatever service your corporation provides.

There are limits to this. For instance, if the $200 is extra money that came in through a grant, then anything you use the money for has to meet the requirements of that grant. So if the grant does not allow money to be spent on operating costs, you can't. End of story.

Good luck!

Answer 4

Yes.

Being non-profit simply means that you don't declare a profit at the end of the year and excess revenues are not paid out to an owner or to stockholders.

Consult IRS.gov.

Additionally, I would think this is a pretty basic question for someone who is starting a 501c3 organization. Have you done your homework regarding accounting and organization?

Answer 5

yes
you need to pay the necessary fees to provide the service... and staff costs (all staff) are a legitimate cost.

the key factor you need to look at is sustainability - and if you are not taking some renumeration... how is this sustainable?

it means that as a non-profit you cannot profit share as the owner

talk to your accountant to sort the details out.
you as director may not be in a place to pay yourself for a while while cash flow is sorted - but this can be held for you in a directors load account.

good luck

Answer 6

Yes you can pay your staff. Be very careful of what you pay yourself, so it's just a reasonable amount for the actual work you do specifically for the purpose of the organization - there are rules on what board members can be paid.

Answer 7

They weren't audited. it is totally distinctive. They have been burdened throughout the time of the appliance technique. IRS utility became into set as much as flag Tea celebration communities from the loads of alternative applicants, their purposes set aside and at the back of schedule or denied totally, and that they've been provide standards that different applicants do no longer could desire to fulfill. They have been sent letters annoying lists of member names and donors. it is carried out purely whilst being investigated, no longer for the duration of application or without reason. So the respond could be no, this became into no longer recurring or some thing to be predicted.

Answer 8

Yes

Answer 9

yes, that's how nonprofit daycares make their money. Some even own the building they use and charge themselves rent!

Edit: giving me the 'thumbs-down' doesn't change facts. I worked at a "non-profit" daycare. The owner paid herself a salary for being the director, and charged herself rent on the building she owned.

Answer 10

yes but it needs to be listed on your annual budget.