What defines a legal charitable organization?

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What defines a legal charitable organization?

In other words, what percentage of funds raised can go towards salaries of employees, and what percentage must benefit your charity’s cause? Also, is it required for you to make these percentages known?

Asked on July 26, 2013 under Business Law, Connecticut

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

It depends on whether you have a certain type of 501c organization. You will have to be able to report these percentages to the IRS to prove your charitable status and continuing status but you would need to show directors, as well. Talk to a business law attorney. Think of the big charitable organizations and how they continue to have non-profit status but earn great salaries.


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