501 (C) 3 Elucidation of salary

There seems to be a misunderstanding on the term "nonprofit" and the status of federal tax relief. Some of the questions of people I often hear, "Why does the nonprofit organization's director receive salary?" Egypt "Why can non-profit organizations collect money and pay employees?" It is a difficult question not to stop with the wrong tiptoe or to be answered without being bound by philanthropy, social work, wage and non-employee political views. So, for objectivity, let's analyze what it means to be a non-profit organization in the United States

Although tax exemption application has various structures, the most common is 501 c 3. 501c3 Nonprofit organizations can form only for the sole purpose of doing charitable activities and can not benefit private shareholders. The Internal Revenue Service (IRS) is aimed only to regulate, monitor, and promote charitable activities of activities conducted by 501c3 organizations.

However, different perspectives of what constitutes philanthropy are widely defined as being considered beneficial to society, or having the purpose of advancing social change. For this reason, the federally accredited 501c3 organization has limited scope and quantity of political involvement, also called lobbying, that the administration can do. The Federal Government implements these regulations to enable the protection of unjustified populations while minimizing political commitment to maintain the integrity of charitable organizations. Voices that may not be heard otherwise, not for the support of established and focused nonprofit initiatives.

Organizing a nonprofit organization successfully and becoming accepted as IRS exemption is usually a process that can take up to 15 months to complete. The application process is very strict and often requires the assistance of a lawyer specializing in nonprofit law. Before an organization can be tax free, it must meet specific criteria such as:

· Formation as a union, trust, or corporation

· Identifiable charity objectives (classified as IRS)

· It will exist for at least 3 years

· Submit articles on organization and financial statements

· Hire five officers of volunteers who meet physically twice each year

In addition to the fact that the establishment of a nonprofit organization needs to set long-term goals to achieve tax exemption status, the organization must comply with additional criteria for accountability. As stipulated by the Better Business Bureau (BBB), the standards of responsibility for charitable activities spend at least 65% of the expenses sponsored by each non-profit program in program activities, 35% or more in funding, .

Regarding the remuneration of directors, any director who pays any kind of salary is forbidden to be the chairperson or treasurer of the board. But what people really are interested in is why board members and program staff are first compensated for charity. The answer is simple. Even volunteering time is calculated at a specific rate and is considered a spot donation. You may not like the fact that someone is paid to organize worldwide efforts to cure cancer and correctional poverty, but these are large projects and these resources are in place Otherwise, promotion of altruism is very difficult.

Return to the original question - "Why is a non-profit organization allowed to collect money and pay for employees and officers using that money? - The best way to explain this is to use non-profit organizations The overall goal of the business is not to generate any profit but to influence the target population of a particular service environment To achieve that goal, Organizations need to achieve goals that require resources, resources require money.