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Can I stay on salary as PR & advocate?

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Can I stay on salary as PR & advocate?

I am the founder of a 501(c)(3) group home for individuals with autism, founded for my grandson who is autistic, and others like him. I decided to step down as executive director. I never paid myself more than $2,000/mo. I wanted to stay on salary as PR & advocate. The board says I cannot because of the new employment law. I'm Founder, was executive director & my grandson lives there. Is this correct? They now will not let me see financials, minutes or anything even though it is public information. I live on my Social Security & my husband's retirement & don't have enough money to live on.

It is unfortunate that you didn’t get the compensation situation resolved before you stepped down as executive director, when you had a little leverage to get a good severance arrangement.  I don’t know what new employment law they may be talking about in saying you can’t continue to be paid for services rendered, but even if they have the right to employ you, without a contract, it is up to their discretion.  You haven’t suggested any legal basis to require it. Now you have to plead.

If you gave up a position as a director and/or as an officer, you may be legally just like any other member of the general public.  You have the right to see the tax return, but not other financials, minutes or other records.

It sounds like another situation in which a founder could have protected herself by creating a single member membership corporation, rather than a board-only corporation populated by her friends.  (See Ready Reference Pages:  “Whose Organization Is It?” and “Sole Member Bylaws Can Protect Founder of Nonprofit”) Nonprofit entrepreneurs ought to take notice. This is not an unusual situation.

Wednesday, September 7, 2011

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