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> This means that if they get 5 million dollars and only spend 4 million, no one gets to take home the extra million. It has to go back into the business. I wo
by nickjj 7y ago
> This means that if they get 5 million dollars and only spend 4 million, no one gets to take home the extra million. It has to go back into the business.
I wonder where the line is drawn on that.
For example, can the CEO buy a house to live in and then claim it's investing in the business because that's where he works remotely once in a while?
Also on the salary itself, do you pay regular income tax on that (separate from the company, but as an individual receiving a salary)?
- justusthane 7y agoYes, you pay income tax.
- mthoms 7y agoYes, each salary is taxed normally. Then, there are laws against non-profit executives enriching themselves[0]. The government watches this very closely. Also, public non-profits must release regular reports on their finances. So, contributors can decide for themselves whether the funds are being used appropriately. That's the basis for sites like https://www.charitynavigator.org https://www.charitynavigator.org [1] and https://www.guidestar.org https://www.guidestar.org One particularly important metric is how much the organization spends on overhead vs how much is spent directly furthering their cause. [0] Religious organizations seem to play by a different set of rules, but thats neither here nor there. [1] A non-profit is not necessarily a charity, but this gives you an idea of how both can be evaluated.