Compensation Benchmarking

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Categories: Supporting Your Foundation

Search Topics: Foundation Source Services

Foundation members often ask if family members may be compensated for their work on the foundation. The short answer is yes, they may be paid. However, the issue of compensating foundation “insiders” (insiders include trustees, directors, officers, donors, and foundation managers as well as their immediate relatives), is fraught with risk. The IRS deems excessive compensation as self-dealing, which could result in the loss of the foundation’s exempt status, substantial penalties, and personal liability.

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