A 501(c)(3) organization has been awarded a grant. The chair or president of the organization was written into the grant to be the program director for the grant and a salary was written in the grant for the chair/president. Can the chair/president receive that salary?
It is unusual for a board chair or president who is not also the CEO to work as a project manager, but there is nothing illegal or necessarily improper about it. Under general state nonprofit law, it is permissible to pay reasonable compensation for services actually rendered. If the position is included in the grantmaker-approved budget and the board chair actually does the work, it is not likely to be unreasonable under state law.
You do have to be concerned, however, about the total compensation of the board chair to be sure that the project pay and all other compensation from the organization does not add up to an unreasonable amount for comparable work. The board chair, and the directors who approve the compensation, can be subject to penalties under the excess benefit tax rules if the total is deemed unreasonable. (See Ready Reference Page: “Charities Must Avoid Excess Benefit Transactions”)