Structure of Non-profits and Moral Hazard When one looks at a Non-Profit Organization there are three main things people notice.

1.They are an Income tax exempt organization

2. They are primarily financed by donations
3.They are heavily reliant on volunteer labour

what systems are in place to see that surplus income is not redistributed among stakeholders or among board members?
Although they are non-profit organizations, they still submit legal documents such as statement of cash flow, statement of financial position, etc.

These contain detailed information of the spending of such organizations.