Board members getting paid?

There was an interesting article in the Washington Post July 11, 2009 about condo officers deciding they deserve to be paid.

Condo Officers Can’t Pay Themselves Fees if Bylaws Forbid It by Benny L. Kass

In my opinion, to allow board members to be compensated for their service will open the door to owners who only want to serve for the money, and not for the best interests of the association.

Overall, membership on the board of a nonprofit organization is considered as a voluntary commitment. The federal Volunteer Protection Act of 1997 (42 USC §14505(6)) that defines “volunteer” as:

an individual performing services for a nonprofit organization or a governmental entity who does not receive—

  1. compensation (other than reasonable reimbursement or allowance for expenses actually incurred); or
  2. any other thing of value in lieu of compensation, in excess of $500 per year, and such term includes a volunteer serving as a director, officer, trustee, or direct service volunteer.

This means board members may not receive any special allowances where the general members would be expected to participate differently. This include: no free conference registration, free advertising or free membership when regular members of the organization have to pay.

And, perhaps most importantly, paid board membership is generally frowned upon by funders.

Board members are, however,  typically reimbursed for reasonable incurred expenses to attend required meetings.

There may be laws about this in your state. If you are considering paying board members for service. Check with the agency that regulates nonprofits in the home state of your corporation. That information is available on line at the IRS web site here.

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