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Board members that receive compensation for their service as board members can lose immunity in lawsuits that exists in some states for volunteer board members. Many state specific principles and practices and Standards for Excellence ® address compensation for nonprofit staff and boards.
Board members usually get paid for their services, but the exact amount each member receives depends on several factors. According to Indeed, the average board member salary in the U.S. is about $84,911 per year. Typically, board members receive a retainer fee for their services instead of an hourly wage.
State laws may limit compensation paid to board members. For example, no more than 49 percent of the board members may be compensated or related to someone compensated by a California nonprofit public benefit corporation, but this prohibition excludes any reasonable compensation paid to a board member as a board member.
A complete guide to how much nonprofit board members get paid. Understanding IRS regulations for nonprofit board members, who can serve on the board, and how to compensate them.
As mentioned, the federal tax laws governing tax-exempt nonprofit organizations (such as 501 (c) (3), 501 (c) (4), and 501 (c) (6) organizations) do not prohibit compensating Board members for their Board service, so long as the compensation is not more than “reasonable” for the services provided.
Instead of a salary, board members can receive payment in the form of per diem payments, stock options, or reimbursement for expenses incurred while performing their duties. In select cases, board members may also receive a stipend of honorarium for their efforts.
Discussion of pros and cons of providing compensation to nonprofit board members and strategies for mititgating the risk of board compensation.
The average salary for a board of directors member is $78,336 per year. This amount can vary depending on factors like the size of the organization and its industry. Many board members receive compensation as a base retainer fee rather than hourly wages.
While they should not receive any board compensation, neither should nonprofit directors pay expenses above and beyond their personal donations. Nonprofit board directors should not be asked to cover any debts for the organization and should not suffer personally or financially for their services.
If you are wondering whether your organization can compensate board directors, the answer is yes, you can. Section 407 of the Maine Nonprofit Corporation Act (the “Act”) provides that a nonprofit organization “may pay compensation in a reasonable amount to its members, directors, or officers for services rendered.”