I am the co-founder of a new nonprofit organization and the question has come up as to whether or not I can assume a paid position within the organization. Can a co-founder ethically become an executive director?
There is no ethical or legal reason that a co-founder may not become the executive director of a nonprofit organization. (Some states may require a certain percentage of independent directors on the Board.) Some of the most effective groups are run by their founders. If the founder is the executive director, it is probably even more important to be sure to follow the rules for excess benefit transactions to assure that an independent group of the Board approves any financial arrangement. (See Ready Reference Page: "Charities Must Avoid Excess Benefit Transactions.”)