FundRaiser Blog

The FundRaiser Software Blog is an excellent resource for nonprofit organizations looking to learn more about fundraising, donor management, membership management, and much more.

Board Member Paying Staff Member Extra

Ananias

Dear Kim,  

I chair the board of a small religious organization.  Each employee has to raise a certain amount toward their salary and this amount is set by the board, as are the salaries. Recently it came to my attention that one employee is receiving additional support from a board member who provides a designated gift for that individual’s support. I was caught off guard to find that this individual is making more money than we knew and that a particular board member is providing it.  This seems like money laundering to me. The board member is making a financial gift to a family, and running it through the non-profit so that it can be tax deductible. Is there an IRS rule, or a piece of governance that would prevent this sort of thing from happening? 

~Ananias Revisited 

Dear Ananias, 

I will let readers find the story you allude to. (HINT: Christian testament, Book of Acts). I hope your story does not end quite as dramatically!  

Unless the board member is related to the staff person, or in some way financially benefits from this arrangement, I don’t think this would be money laundering. You might check with an attorney or an auditor, but I don’t see anything actually illegal here.  

However, there are serious governance issues here and they all lead to one overriding problem:   a lack of transparency on the part of this board member. You have one employee who is paid differently (and presumably more) than all the other employees because you have one board member who is disregarding the salary levels established by the rest of the board. As the chair, you need to have an honest conversation with this person to let him or her know that this is not OK.

I also wonder about this employee. That this individual is willing to go along with this deception would raise questions about his or her honesty in other areas of the job.  Aside from having some open conversation about this, you need to establish a gift acceptance policy, which, among other things, outlines the protocols for accepting designated gifts. Generally, when a donor says, “I want my money to go to X,” the board must be consulted if the amount the donor wishes to give is significant. (And the meaning of ‘significant’ is set by the board.)  

In all things like this, I would follow the Quaker adage, “Assume good intent.” There could be an understandable explanation for this arrangement, especially if it has only gone on for a short time. But also, I would put a stop to it immediately.  

Good luck to you.  

~Kim Klein

To learn how FundRaiser can help you track donations and donors, take an online guided tour of FundRaiser 

Effectively Track Online Donations
Can FundRaiser Track Volunteers?

Related Posts

Wait a minute, while we are rendering the calendar
Facebook Donor Portal LYBUNTS custom page user interface community broadcasting auction donor slip building donor relationships banquet Alternative Addresses technical support overview new nonprofit repeat donors raffle membersip benefits lapsed donor entering auction gifts mission driven office Cloud volunteering solicitors follow up in honor of donations fundraising letters Task List data entry budget training SYBUNTS segmenting donors Crowdfunding Campaign gift entry relationship tracking personalizing letters new version new leadership operational costs GivingTuesday Reminders correspondance PayPal on site training Thank You Thanksgiving phoning donors donor loyalty donor advised funds merge notes password protection donor targeting major gift prospects tax summary letters donor retention rate NCOA processing communications texting donors appeal letters annual campaign gift notes field word processor Personalizing adding personal notes to letters membership programs publicity materials social media online donations letter templates thank you letters FundRaiser Hosted data conversion capital campaign role of nonprofits endowment campaign monthly giving government grants donor user spotlights flash sales look and feel new donors mode code upgrade giving levels transparency operating systems annual maintenance plan Congratulations community supported gardens moves management happiness arts announcements corporate sponsors National Change of Address #GivingTuesday updates FundRaiser Spark fundraising features reports backing up data New Year small donations GoFundMe project Network for Good add ons change of address updating security In-Kind gifts spare fields End of Year Letters animal rescue donation history vacation Company culture donor recognition donor attrition rate volunteers legacy giving welcome packet merge fields tech tip Snow Birds anonymous donors direct mail new features disaster relief alumni targeted mailings online donations Tickles Volunteer module pledges case study Importing Data campaign management membership benefits Facebook campaign Codes how-to videos Excel correspondence premiums how to handle auction gifts training tip community arts nonprofits advanced tab customer service donor profile memorial giving brick campaign importing csv charity golf tournaments giving history foundations board members donor attrition customer portal motivation data analysis product news nonprofit fundraising grants major donors prospects grassroots campaign ticket sales large donations motivation code upgrading donors donor contact information the Ask gift acceptance policy donor preferences pictures development director general recurring gifts tribute gifts Groupings spreadsheets salutation ROI Reporting to IRS Constant Contact planned giving ticketsales accounting software Resiliency donor source support increasing giving amounts understanding giving trends event management

Connect With Us

  800-880-3454 ext 3
  Email Us
  Request More Information
  Monday-Friday
      8:30AM-5:30PM CST

Customer Portal Login Form

User Name:
Password:

If you are not sure about your Customer User Name, please call 800-543-4131 and we will be able to help you.

Or you have lost your password, Request Password