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contributions vs loans to NFP

nytcpa2012
Level 3

Can an individual how started an NFP, and who is still active as an Officer and Board member make LOANS to the NFP?  

Are there limits on that or on contributions from a "founder"?

Seems like many NFP's require a lot of $$ infusions from those starting it up to get on their feet.  What is the proper way to handle those infusions?

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sjrcpa
Level 15

Yes they can make loans. Document with loan agreement. Charge interest.

It will be disclosed on the 990.

Do they think they will get repaid? Or is it really a donation?


ex-AllStar

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sjrcpa
Level 15

Yes they can make loans. Document with loan agreement. Charge interest.

It will be disclosed on the 990.

Do they think they will get repaid? Or is it really a donation?


ex-AllStar

View solution in original post

nytcpa2012
Level 3

Thank you!  Yes, at some point they do expect to be repaid. They are really starting to take off in 2021.

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