Paying the heads of non-profits: what the law actually says

The pay of the head of the Paris 2024 organising committee drew sharp criticism. The public debate often blurred two separate questions: whether the pay is lawful, and how the association is taxed.

The principle and its adjustments

The French law of 1 July 1901 on associations rests on a non-profit purpose and disinterested management. Even so, the law allows executives to be paid up to three times the annual social security ceiling without calling that disinterested management into question.

Beyond that threshold, an association can still pay its executives and carry on profit-making activities: it simply loses the tax benefits of disinterested management (Article 206, 5 of the French General Tax Code), which is not an offence in itself.

The criticism was therefore a matter for scrutinising the pay arrangements and auditing the accounts, not for the criminal law. The episode is a reminder for associations to put their executives’ pay on a sound footing in advance.