Founder and Trustee of Not for Profit

General
1

Hello everyone, I run a not-for-profit and have been paying myself a salary.

a) What do founders usually do to show their documentation of salary? Should I create a consultancy agreement for myself as well?

  1. Additionally, if our organisation plan to give appraisal in six months. Does that appraisal of founder’s salary looks bad from funder’s point of view? Sometimes I feel funders will feel that out of organisational 100% budget why is 30/40% is going to his pocket, even though 75% of the work is managed by me and my market competitive salary is substantially higher than my NGO will pay me?

  2. I am the sole trustee, founder, board members are 2. Should I also diversify my board members and trustees? What are the repercussions of me being in control here?

Would appreciate any advice and suggestions.

Thank you everyone!

2

a) Since you are a specified person under Section 13, setup an engagement contract where the compensation should be reasonable i.e. based on your qualification, experience etc such compensation should be in line with the market rates or reasonable. The onus of providing that the compensation is reasonable is on the organization. The arms length relationship is the crux.
2. Performance appraisal is an annual matter as per HR policy normally and should be good practice. Please have your remuneration budgeted and accordingly charge as long as it is approved.
3. You can continue with 2 trustees but ensure delegation of authority appropriately. You can expand your BOT as provided in Trust Deed or amend the same if required.
CS Sharad Bhargava