Nonprofit CEO Spending Money on Personal Use

M

Melanieshen1234

New Member
Jurisdiction
New Mexico
Hello, I was just curious is it illegal for the CEO of a non-profit organization ( that receives all their revenue from donations) to spend organization money on Personal Use like massages and weight loss supplements and such?
 
Melanieshen1234 said:
Hello, I was just curious is it illegal for the CEO of a non-profit organization ( that receives all their revenue from donations) to spend organization money on Personal Use like massages and weight loss supplements and such?
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Probably, maybe, should be, I'd think so.

I just asked my wife, she agrees, probably, should be, more than likely is......

I asked one of the paralegals and she says, I'm thinking it should be illegal.
 
should be ethically, but it might not be. You would need to check with the Board of Directors of the nonprofit to see if the expenses were approved - I know of at least one non-profit that pays for gym memberships for certain employees/directors, for example.

If you feel it is excessive, you could make a complaint to the BODs directly or read how to go about making a complaint with the IRS: IRS Complaint Process Tax Exempt Organizations | Internal Revenue Service
 
Legal? Probably, but it also probably violates the CEO's fiduciary duties to the corporation's shareholders and might possibly put the corporation's tax exempts status in jeopardy.

Why do you ask?
 
Well, this country just elected a guy who used non-profit funds to pay for a gigantic portrait of himself, so... In order to claim non-profit status, there are certain requirements as to financial disclosures and use of funds. There is still a lot of latitude when it comes to using funds including as part of a compensation package. The cost of vitamins and massages would count as taxable income to the employee, but there is nothing that states outright that this could not be offered as a benefit.
 

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