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Is it illegal to pay a fundraiser a percentage of funds raised?

Your Legal Questions Answered

Is it illegal to pay a fundraiser a percentage of funds raised?

Is it legal to charge a percentage of gross income from fundraising as salary instead of a base salary?

You have raised one of the really interesting issues of charitable fundraising. In general, it is not illegal to pay a fundraiser a percentage of the funds raised. It is considered unethical, however, by the Association of Fundraising Professionals and other professional organizations and is therefore seldom done by established organizations. You could also run into an excess benefits tax problem if the resulting compensation is not considered reasonable by the IRS.

Friday, September 5, 2008
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