Can a Non Profit Organization pay its members?

Is it legal in the United States for a non-profit organization to use unpaid volunteers to run a food or concession stand on a permanent basis to raise money to pay for recreational activities for members of the organization?

• Specifically, I am wondering if this violates the Fair Labor Standards Act because not having to pay volunteers at least the minimum wage provides such a food stand an unfair competitive advantage over for-profit businesses that perform essentially the same service.

• Answer:

  No, it's not illegal. There maybe cases where the city, state, or federal government might decide that specific positions can't be held by a volunteer. But generally speaking, to the best of my knowledge, the answer is no. Technically speaking, both a nonprofit and for-profit can use volunteers to a food concession stand. It's just that most people won't volunteer for you to help make a for-profit more money, but will do so for other reasons. For example, a number of food carts at fairs and community events are run by volunteers of a for profit corporation, say like Oscar Mayer. Company staff or retired employees volunteer, because it makes 'their' company looks good, and gives something back to the community at hand. Now the general issue with using volunteers for staffing a food cart, concession stand, etc., is generally, you're managing far more positions, since most volunteers still have to work, a typical shift maybe  2hr to 4hrs once a week versus 6hrs to 8hrs daily. To fill 20hrs a week, a paid position may need 1 person. While the volunteer option may need to manage at least 10 people. There are trade offs with both method, but what people consider 'an unfair competitive advantage' rarely is. Unpaid labor potential could be seen as an unfair business advantage, if both businesses goals were to make a profit, but since they aren't, your application may not stand. Also, typically, an 'unfair' business advantage isn't / doesn't mean anything illegal or unethical. It generally means, the business offers something it's competitors can't. Unfair Competitive Advantage is in fact, something most businesses strive for. A competitive advantage is something you and your rival compete directly on. We both sell hot dogs, but people in your are prefer beef hotdogs, and you sell beef, your competitor pork. That's a competitive advantage. So are things like better service, longer hours, etc., etc. The 'unfair' is generally added when you or your competitor offers something you CAN'T compete on. They manage their own farm and can provide grass feed, organic, full beef hot dogs, and you can only purchase store bought in bulk. 'unfair' but not 'illegal'. In this case, they're supporting a mission and can get volunteer labor. You're supporting your family and they (your family) maybe the only one's who care enough to help you with that cause for free. If you want to improve your ability to compete, than you could find a better cause and don't a percentage of your profit to it. Many places do Giving Tuesday's. 10% of receipts for that day goes to a charity of their choosing. Maybe people would prefer to support a food bank over a sports team or elderly health over whatever. That's basically you knowing your audience and community better than your competitor.