Law For Non-Profits is a simple and low-barrier digital platform. It’s designed to help non-profit leaders understand their legal obligations. This tool was created for non-profits working in BC, however, many of the concepts are general in nature and may apply to other provinces Canada that have similar laws. Read more about using these resources from other regions of Canada here.

Can we pay our board members?

We’ve all heard the story of Brian Mulroney and his role on the Board of Airbus Industries.  Wouldn’t it be helpful if we had the option to pay directors of non-profits for their time? It’s common in the business community but not so in the non-profit sector. Why is that? And what exactly are the restrictions on remunerating board members?

What does remuneration mean?
Remuneration means  . . . . money paid for work or a service.  In the non-profit world that would paying a fee to directors to carry out their duties as board members such as attending meetings and taking minutes.  

Can a board member be paid for their duties as a director?
Yes. Non-profit directors may be remunerated IF (please note the size of the “IF”) the non-profit’s bylaws allow for it and the amount is disclosed on the financial statements  BUT charities and most funding bodies and agencies do not permit directors to be paid as directors. 

What about expenses?
Expenses that are incurred by directors while carrying out their duties such as gas, travel to meetings are treated differently from remuneration.  Reasonable board-approved expenses can be reimbursed to directors in accordance with the non-profits policy.

Can a board member be paid for services outside of their duties as a director?
People employed by or under contract with the non-profit can sit on the board as long as the majority of the directors are not employed by or under contract with the non-profit.  A board member may also be paid for services unrelated to their duties as a director, such as a director catering an event. Any non-profit with these practices should have a conflict of interest policy in place and the director would have to openly declare the conflict of interest. The Board would then meet and “waive” the conflict. Read our full guide on how to handle conflicts of interest here.

What are the next steps your non-profit can take? We recommend trying our Societies Act Legal Help Guide, just one of our many free resources available for non-profit legal information. Answer a few plain language questions and you’ll be provided with a checklist to help your non-profit legally compliant. For additional information on remuneration, read our Fact Sheet on Directors.