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Your accountant and lawyer can help you decide how to organize your own NFP and they can show you quite clearly what the expected caps on your salary and other compensations will be. It can be a lucrative, stable income to manage your own NFP. One of the reasons that the government of New Mexico is so poor is that NM has more NFPs per capita than any other state. NFPs are big business in the Land of Enchantment... but they are even bigger business in the Empire State (see here).
If you look at the books of National Public Radio, you will see that they made a profit of $24 million last year. But that "profit" was given the name "Net Assets."
http://www.npr.org/about/statements/fy2007/fy07consolidatedreport.pdf
The New York State Society of Certified Public Accountants explained the matter succinctly in its February 1994 newsletter.
Net assets is not a new term to accountants. It is used in the financial statements of employee benefit plans. It was introduced to not-for- profit accounting in Statement of Financial Accounting Concepts (Concept) No. 6, Elements of Financial Statements. However, it is not a familiar term to most people involved with not-for-profit organizations. Simply put, net assets replaces the term "fund balance" and is the excess of what the organization owns over what it has borrowed and still owes. The organization may be cash poor, but if it has office furniture and no debts, it has net assets. Or the organization may be cash rich, but if it just borrowed a large sum, it may have no net assets. Net assets are also seen as the cumulative results of running the not-for- profit organization.
What are assets doing on the not-for-profit's income statement? (Accounting)
http://www.nysscpa.org/cpajournal/old/15203128.htm
The difference between "net assets" and "profits" is that profits go to the owner(s) but "net assets" always stay with the organization.
By the way, this is nothing new. See "Profit in Not-for-Profit Corporations: The Example of Health Care," by Amitai Etzioni and Pamela Doty in Political Science Quarterly, Vol. 91, No. 3 (Autumn, 1976), pp. 433-453.
In 1989 and 1991, I served on the board of directors of The East Lansing Food Co-operative (ELFCO). My assignments included the Finance Committee where I learned a lot from the accountant. NFPs have assets, liabilities, incomes and expenses. They also have money left over. We called it "Retained Earnings." ELFCO paid its full and part-time staff and management. They also had volunteers for over two decades. Then, someone sued on the grounds that they "deserved" minimum wage for their volunteer time and some court agreed, so that all went away, and everyone always got paid. Back then, ELFCO turned about $1million a year in sales and had generous healthcare and vacation policies for all staff (not volunteer) employees.
From 2003-2005, I served on the board of the Michigan State Numismatic Society, a 501(c) 7 (seven, not one) corporation. After some bad management and/or hard times, MSNS was close to being in the red, but we are solidly in the black now. The main business of MSNS is to host two semi-annual conventions. The club has about 1000 members, about half of them lifetime. We have about $25,000 in cash and $125,000 in deposit accounts. We are big supporters of local educational efforts, the scouts, and other community projects involving the monetary history of our nation. The secretary-treasurer and the editor of the newsletter both get paid (modestly, but fairly) for their skills.
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