Legal Question in Business Law in Virginia

employee contract for nonprofit

i am the exec director of a new, small nonprofit. we are just starting to get income via donations, sponsors, etc. i would like to start getting paid but there is no definite income coming in. is it possible to draw up a contract that says i will receive a certain amount per hour based on a certain amount of hours and that i will be paid as revenue is received through grants, sponsors, donations, etc?


Asked on 1/27/09, 9:51 am

1 Answer from Attorneys
Jonathon Moseley Moseley & Associates Law Firm

Re: employee contract for nonprofit

Certainly. It would be legally possible to have a contract for a salary more than the moeny coming in, as lnog as your Board agrees and it is objectively reasonable.

If there is not enough money, and you actually did the work, it would simply mean that the foundation would owe you as a debt. It would have to pay the debt when money comes in.

However, what you propose makes good sense. If you do it by the hour, then if you know there is no money you can cut back and do something else for a while.

You can write in the contract that the money is "due" when the foundation actually receives money. But really this is going to be true anyway. If there is no money, the payments can't be made.

Have you filled out all the paperwork with the IRS to make it non-profit and tax-deductible as a 501(c)(3) or (c)(4)? It is important to do that before 15 months goes by.

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Answered on 1/27/09, 12:58 pm


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