I'm working on this: http://ovgl.org/ and I was thinking about starting a non-profit organization for it. This made me wonder if I would gain any benefit from my work if it ever took off. Can I pay myself a small salary of say about $1000/month if the organization's income was higher than it's operation costs?

Disclaimer: I am not a tax attorney. Bollocks may follow.

• Don't confuse a non-profit organization with a tax-exempt organization. While you must be a non-profit to qualify for (most) tax exemptions, not all non-profits are tax exempt, and the exemption is far from automatic.
  
  
  • All non-profits must disclose their financials to the general public, as a matter of law. Keep this in mind for potential privacy issues. For instance, it may be useful ammunition if anyone wants to sue you - they'll know exactly what you are worth. This is not necessarily the case for privately owned corporations which are not non-profits (IIRC).
    
    
    • The IRS has the authority to fine non-profit entities which "unfairly" compensate their employees or shareholders. The definitions of this are wrapped up in miles of legalese, so I can't help with specifics, but be warned that it isn't always just a matter of paying out whatever money you want. Again, this is specific to non-profits; a for-profit corporation can pay you as much as you like.
      
      
      • The point of a non-profit is that you are declaring an intent not to profit - not that you don't think you'll make any money for a while. You are not legally allowed to transfer net gains to the owners of a non-profit to zero out the balance at the end of the fiscal year. Any money you make must go either to employees (as defined legally - i.e. not owners) or be reinvested into the "activities" of the corporation itself. Bottom line: if it's just you, don't bet on taking any of that money for yourself.
        
        
        • With those caveat in mind, it is legitimate to receive compensation for services rendered to a non-profit... so long as you don't own it. Given the legal hurdles and red tape associated with non-profit and especially tax-exempt status, chances are you don't want to risk pulling any shenanigans lest the IRS audit and fine you. And the fines generally hurt a lot. For example, you could buy a nice house in Colorado, or you could get fined by the IRS for screwing with the tax system... about even.
          
          
          • This one I'm not 100% on so do some research yourself, but I don't think tax exemption for non-profits applies to salaries paid to employees. AFAIK it's only tax exemption on the income of the corporation, i.e. you still are liable for personal income taxes on any money you are paid by a non-profit. The main benefit of, eg. 501(c)(3) exemption is that it allows people to deduct donations made to the non-profit entity from their own taxes.

Steve,
If you live in the United States you can get lots of beginner business advice from the Small Business Administration. They have an office in your area. http://www.sba.gov

Can I pay myself a small salary of say about $1000/month if the organization's income was higher than it's operation costs?

You can't but the non-profit can. OK while I am being picky as to your phrasing I am only doing so because it highlights an important point about non-profits, which is that you don't own the non-profit and its policies would be set by its board. According to the society for non-profit organisations a non-profit has an autonomous board and while you may sit on the board and vote on matters of policy [font="Arial Rounded MT Bold"]"on issues that affect your employment, salary, and benefits, you must excuse yourself from voting." [font="Arial"]Source: http://www.snpo.org/resources/startup.php#shouldi[/font]
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If you are trying to setup some kind of business for yourself without actually going through the proper channels to setup a commercial business you are asking for heaps of trouble. There are strict laws on non-profits to prevent this kind of thing.

[quote name='SteveDeFacto' timestamp='1296812469' post='4769433']
Can I pay myself a small salary of say about $1000/month if the organization's income was higher than it's operation costs?

You can't but the non-profit can. OK while I am being picky as to your phrasing I am only doing so because it highlights an important point about non-profits, which is that you don't own the non-profit and its policies would be set by its board. According to the society for non-profit organisations a non-profit has an autonomous board and while you may sit on the board and vote on matters of policy [font="Arial Rounded MT Bold"]"on issues that affect your employment, salary, and benefits, you must excuse yourself from voting." [font="Arial"]Source: http://www.snpo.org/...tup.php#shouldi[/font]
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Thank you, that's exactly what I was looking for! I was wondering why there were not more companies that are non profit.

Thank you, that's exactly what I was looking for! I was wondering why there were not more companies that are non profit.

Because most companies are set up by people who want to make money, while Non-profits are set up by people whose goal is to serve a purpose or a community rather that make a personal profit. Just like a charity there are strict limits on what they can do and specific requirements as to how they are managed to ensure that they are not simply being used as a tax free company.