Thoughts on paying Not-for-profit boards

By Cutcher & Neale Accounting and Financial Services - March 25, 2021

Chartered Accountants Australia and New Zealand has released Remunerating Not-for-profit Directors, which covers key factors NFP's should consider in determining whether those charged with governance should be paid.

The paper includes a checklist highlighting aspects to be considered when contemplating the move.

Among factors are an entity’s constitution, funding constraints, potential tax implications, and key agreements. An analysis of the pros and cons of remunerating boards is outlined.

The case for remunerating boards centres on a need to attract skilled and diverse people and recognise their time and effort.

The argument for not remunerating them is focused on reducing potential liability risks associated with being a director.

Paying directors might also be contrary to the spirit of the NFP sector. Many believe that all of an NFP’s resources should go to furthering the organisation’s purpose.

Download the paper:

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