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Nonprofit Law/CEO of Non-profit sign checks



I am thinking about turning my partnership into a Non-profit, where I could make myself the CEO.  I found out that I can run the day-to-day operations and sign checks, but would I be able to sign my own paychecks? Or would that be a conflict of interest.

Thank you for your help!

 A conflict of interest is present whenever a director, and in
some states an officer)  has a material personal interest in a
proposed contract or transaction to which the 501(c)(3)
organization may be a party. Some conflicts do not result in any
illegality. We would need to look at the decisions of the
organization or the Directors to decide if their actions are
illegal. This forum is only for federal tax questions regarding
501(c)(3) public charities as I have explained in my profile.

The IRS has published at
---Start of Excerpt--
Where an exempt organization engages in a transaction with an
insider and there is a purpose to benefit the insider rather than
the organization, inurement occurs even though the transaction
ultimately proves profitable for the exempt organization. The test
is not ultimate profit or loss but whether, at every stage of the
transaction, those controlling the organization guarded its
interests and dealt with related parties at arm's-length.
---End of Excerpt--

Specifically, as your Board would approve your salary, you could be the signer of the checks.
I have in my profile that this free forum is only for general questions relating to IRS federal exemption issues of 501(c)(3) organizations. But, I will inform you that generally, under state law, the interested director (you) should not vote in the matter of the salary determination, but I suggest you check your particular state's law as to the details.

Harvey Mechanic, Attorney at Law -

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.  

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Harvey Mechanic


DO NOT GIVE ME INFORMATION THAT YOU WANT KEPT CONFIDENTIAL. I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's possible unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "" without the quotes and then add your search terms before hitting enter.


I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.


B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.

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