Can an employee of a non-profit donate back to the organization?
July 7, 2006 2:53 PM Subscribe
Can board members of a non-profit business, who also act as the orginazition's primary salaried employees, donate a portion of their salary back to the non-profit, and if so, would it be tax deductible?
posted by bjork24 to work & money (7 answers total)
As more and more of our services begin to fall into the category of community benefit, we've begun to consider turning our for-profit theater into a non-profit entity. We would have the smallest board required by state law, three members, consisting of myself, my wife, and my sister (who also acts as our CPA).
My wife and I are our business's primary employees, working seven days a week and taking paychecks on a "needs-only" basis. The problem is that as a non-profit we'd need to specify a set salary for ourselves, which doesn't fit into the way we've been running our business.
So, let's say we allot $1,000 per week for our combined income, but only need $300 that week. I assume we can donate the additional $700 back to the organization, but would it be tax deductible? I wanted to arm myself with as many opinions as possible before approaching my sister with this scenario.