Goal- Second hand store. For profit vs. not for profit. If I open as not for profit how do I earn my salary? Can I pay myself

Asked over 1 year ago - Chicago, IL

I want to open a second hand store. I understand that If I open as for profit, then donors cannot right off their donations. If I open not for profit, how can I earn an income? If I open not for profit how much is required to pay to your charity?

Attorney answers (2)

  1. Bruce E. Burdick

    Pro

    Contributor Level 20

    Answered . The courts look to the intent not the specifics. You need to see a business lawyer that has experience in Illinois not-for-profits. If YOU open it up and you benefit, you are for profit. If you set up a not-for-profit corp and that corp opens up the store, you have a good chance of being legal and being able to pay yourself a salary for running the corp. Red Cross pays its managers big salaries (so huge they are continually getting bad PR for it) Salvation Army pays its managers. Susan Komen Foundation pays its managers. This is not as simple as you might imagine, so you need a business attorney to keep you out of trouble.

    I am not your lawyer and you are not my client. Free advice here is without recourse and any reliance thereupon is... more
  2. Brian David Yacker

    Contributor Level 8

    Answered . A charity can certainly compensate its executive reasonably for services rendered to the charity. Please see Section 4958 of the Internal Revenue Code re guidance for paying reasonable compensation.

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