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Home > Careers & Employment > Goverment & Non-Profit > If a new Non-Profit started 1 month ago, how do it pay it's employee?

If a new Non-Profit started 1 month ago, how do it pay it's employee?

Category: Goverment & Non-Profit

TiffanyTiffany


If a New Non-Profit started 1 month ago, everything is set up, office, payroll etc... how does it pay it's employee???? I know it's a Non-Profit so beside their income they do not make any profit, but the CEO/director invest all his money in helping others how does he/she eat, pay his rent etc if they have no money? How does the payroll company work?

Piggiepants
Piggiepants

A nonprofit can't make 'profit' that benefits any individual (like an owner) but it can raise as much money as it wants (or as much as it can) and use whatever is left over after they fund their mission to to pay their operational expenses, including salaries. Excess revenue (profit, to you) is invested back into the programs of the organization, not distributed to anyone's personal benefit.

Due to the difficulty in raising funds in their early stages, many new nonprofits rely entirely on the work on volunteers - that is, people, even the founder or the Executive Director, who are willing to put in the time without salary because theybecause they believe that their mission is of critical importance. Once a nonprofit is more established, it should have access to a more regular flow of revenue from fundraising - individual donors, foundation funding and grants - that can be used to help pay staff salaries and other operational expenses.

Some nonprofits are founded with a large sum of money (from a bequest or generous donor) which they then put in the bank or invest, and can use the interest to help paying expenses.

rtfm
rtfm

The director wouldn't invest all his salary in the business unless he had some other source of income somewhere. A non-profit is managed just like any other type of corporation: the employees and the officers make a regular salary.

If the non-profit isn't making enough income to pay all its employees' salaries, then there's a problem and their business plan needs to be revised.

Carol A
Carol A

Hi you add up all the total income then add up all expences eg.wages, rent all general bills and what is left is then put back into the company hence the is no profit left. i hope this of use.

carol A


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