# Problem with nonprofit Association tipping its staff (US)?

**URL:** <https://boards.straightdope.com/t/problem-with-nonprofit-association-tipping-its-staff-us/474306>\
**Category:** Factual Questions\
**Created:** [November 24, 2008, 7:28pm UTC](https://boards.straightdope.com/t/problem-with-nonprofit-association-tipping-its-staff-us/474306 "2008-11-24T19:28:41Z")\
**Posts on this page:** 4\
**Page:** 1

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**Author:** ![drhess](https://avatars.discourse-cdn.com/v4/letter/d/94ad74/32.png) [@drhess](https://boards.straightdope.com/u/drhess)\
**Post date:** [November 24, 2008, 7:28pm UTC](https://boards.straightdope.com/t/problem-with-nonprofit-association-tipping-its-staff-us/474306/1 "2008-11-24T19:28:41Z")

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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.)

-Doug

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**Author:** ![Gangster\_Octopus](https://avatars.discourse-cdn.com/v4/letter/g/a8b319/32.png) [@Gangster\_Octopus](https://boards.straightdope.com/u/Gangster_Octopus)\
**Post date:** [November 24, 2008, 7:32pm UTC](https://boards.straightdope.com/t/problem-with-nonprofit-association-tipping-its-staff-us/474306/2 "2008-11-24T19:32:07Z")

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Wouldn’t it depend on the particular condo association bylaws?

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**Author:** ![drhess](https://avatars.discourse-cdn.com/v4/letter/d/94ad74/32.png) [@drhess](https://boards.straightdope.com/u/drhess)\
**Post date:** [November 24, 2008, 7:39pm UTC](https://boards.straightdope.com/t/problem-with-nonprofit-association-tipping-its-staff-us/474306/3 "2008-11-24T19:39:54Z")

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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).

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**Author:** ![Munch](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/munch/32/5281_2.png) [@Munch](https://boards.straightdope.com/u/Munch)\
**Post date:** [November 25, 2008, 12:02am UTC](https://boards.straightdope.com/t/problem-with-nonprofit-association-tipping-its-staff-us/474306/4 "2008-11-25T00:02:27Z")

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> [@drhess](#):
>
> 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.)
> 
> -Doug

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.