[nickjj]

> This means that if they get 5 million dollars and only spend 4 million, no one gets to take home the extra million. It has to go back into the business.

I wonder where the line is drawn on that.

For example, can the CEO buy a house to live in and then claim it's investing in the business because that's where he works remotely once in a while?

Also on the salary itself, do you pay regular income tax on that (separate from the company, but as an individual receiving a salary)?

[mthoms]

Yes, each salary is taxed normally. Then, there are laws against non-profit executives enriching themselves[0]. The government watches this very closely.

Also, public non-profits must release regular reports on their finances. So, contributors can decide for themselves whether the funds are being used appropriately. That's the basis for sites like https://www.charitynavigator.org [1] and https://www.guidestar.org

One particularly important metric is how much the organization spends on overhead vs how much is spent directly furthering their cause.

[0] Religious organizations seem to play by a different set of rules, but thats neither here nor there.

[1] A non-profit is not necessarily a charity, but this gives you an idea of how both can be evaluated.

[justusthane]

Yes, you pay income tax.