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Nonprofit Law/President/Board Member Stipend


I am a board member and Treasurer of a one year old non-profit organization in the state of Wyoming that has applied for but not received our 501c3 status.  Our President, also a Board Member, requires some compensation for the time that she is spending on the organization's daily business.  Can we provide her with a modest stipend until we can restructure the organization and offer her a salary?

The IRS has written
--- Start of Excerpt ---
A stipend is defined as a fixed sum of money paid periodically for
services or to defray expenses. The fact that remuneration is
termed a "fee" or "stipend" rather than salary or wages is
---End of Excerpt---

Anyway, The IRS does allow 501(c)(3) organizations to give someone compensation just so it is not more than what  is reasonable. Starting on pdf page 10 of
the IRS discusses many of the factors it would look at to decide whether a salary is reasonable.

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


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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