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


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

Connect With Us

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

Customer Portal Login Form

User Name:

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