My condo association wanted to tip the worker for the firm that cleans the building (same person always does it) and give a gift (like restaurant certificate) to the mgmt firm. Somebody on the board says this isn’t some the board can do with board funds. For the life of me I cannot see why. Granted, most nonprofit boards that I have worked with that give out gifts to employees have given out plaques and such for recognition of service, but is there a reason money cannot be given by the board to its agents? Is this “gift” dissimilar to compensation or is there a tax reason (or complication) for this?
(Of course, the alternative we may implement is just to gather voluntary donations for the residents.)
I doubt by-laws prohibit it. I’m just wondering if there’s some tax reason for why a non-profit cannot single out staff for monetary gifts (or even if it just becomes complicated).
There’s nothing wrong with what is proposed (unless specifically prohibited in your organization’s specific by-laws). What the board member is probably thinking of is that this somehow constitutes a disbursement of profits, such as what happens with dividends to stockshareholders. Non-profits are specifically prohibited from having shareholders (where the “non-profit” part comes in). Your assoc. does not have shareholders, so doing this is not doing something that is prohibited.