Turn passion into profit with Printify
Thinking about selling merch to raise funds? You’re not alone. Print-on-demand products can be a smart way for nonprofits to boost visibility and revenue to support their cause.
But can nonprofits sell products? It depends. From tax rules to mission alignment, there’s more to it than just setting up a merch shop. Let’s break it all down so your nonprofit can sell smart – and stay compliant.
This content is for informational purposes only and does not constitute professional advice. The content is based on our understanding as of the date of publication. Readers are encouraged to seek advice from qualified professionals. Any actions taken based on this information are at your own risk.
Can nonprofits sell products?
Yes, nonprofit organizations can sell products, but the key lies in why and how they do it.
The IRS (Internal Revenue Service) doesn’t mind you selling merchandise or offering products, as long as the sales align with your nonprofit’s exempt purpose and don’t cross into unrelated business territory.
Your tax-exempt status as a nonprofit organization means you get to raise funds without paying certain taxes, but only if you stay compliant.
This doesn’t mean you can’t earn revenue through product sales – it just means you need to play by the rules. Let’s look at what that actually means.
Read our guide to find out how nonprofits make money and brainstorm ideas for your own organization.
IRS rules and tax implications for nonprofits selling products
Before you start selling t-shirts, totes, or calendars, it’s crucial to know the tax rules. Here’s what you need to keep things legal, smooth, and stress-free.
What is Unrelated Business Income Tax (UBIT)?
Unrelated Business Income Tax (UBIT) kicks in when your nonprofit organization gets paid in a way that isn’t tied to your cause. That money would be classified as unrelated business income – and it’s taxable.
Mission-driven revenue stays tax-free. Everything else? Not so much.
Align product sales with your nonprofit’s exempt purpose
To keep your tax exemption status intact, any income-generating activities need to be substantially related to your mission.
Here are some good examples:
- A wildlife charity selling custom merchandise featuring endangered animals.
- A literacy nonprofit selling educational materials or t-shirts with slogans about reading.
In contrast, here’s a bad example:
- A literacy nonprofit running a gourmet coffee brand with no ties to books or reading. That’s considered unrelated business income and may trigger business income tax (UBIT).
Stay compliant by making sure your product sales support, promote, or raise awareness around your cause.
If you’re doing unrelated activities just for financial gain, the revenue you earn is liable to be taxed.
Tax-free basis vs taxable business activities
- Tax-free basis: Revenue from fundraising efforts or product sales that are substantially related to your mission – this income stays untaxed.
- Taxable business activities: When you sell products or launch business activities unrelated to your mission (like a side business for profit), the income becomes taxable under UBIT rules.
Your nonprofit can still generate income, but staying aware of which activities are mission-aligned and which aren’t helps you avoid tax issues.
How to maintain tax-exempt status while selling branded merchandise
Here’s how to protect your tax-exempt status and still sell products to raise funds:
- Stay mission-focused. Tie your merchandise sales to your nonprofit’s goals.
- Consult professionals. A tax professional or nonprofit attorney can help you spot issues early.
- Be transparent. If you earn unrelated business income, don’t hide it (IRS Form 990-T). Reporting unrelated business income correctly helps maintain your tax-free basis.
- Collect sales tax. Depending on your state, you may need to collect it. Nonprofits aren’t always exempt from sales tax on products.
Check out the IRS’s guidance for exempt organizations to make sure that your nonprofit stays within the law.
Even if you start with mission-aligned sales, regularly review your income-generating activities. If your revenue stream grows or shifts, check that you’re still in compliance with the Internal Revenue Code section that governs exempt organizations.
What products are popular with nonprofits?
The right products can create a steady revenue stream while amplifying your message far beyond one-time donations. In fact, merchandise sales have become a staple of fundraising ideas in the nonprofit sector.
- The frequency of donations can improve up to 75% when a gift or product is given in return – whether that’s a t-shirt, a downloadable resource, or a keepsake.
Our tip? Choose items that align with your organization’s mission, strike a balance between useful and meaningful, and price them for your desired profit margin to make it all worthwhile.
Physical goods for nonprofit product sales
People love to wear, display, or use products that support a cause they believe in.
Physical products also act as free promotion. Every time someone wears your custom tee or uses your mug, it grows your nonprofit’s visibility.
- T-shirts and hoodies. The go-to fundraising staple. Timeless, wearable, and easy to customize.
- Tote bags. Eco-friendly and practical – ideal for community events and giveaways.
- Water bottles and mugs. Useful items that make great donor gifts.
- Stickers and pins. Budget-friendly with high visual impact for smaller donations.
- Caps and hats. Perfect for outdoor events and spreading your cause on the go.
While those are the most popular fundraising products, don’t limit yourself to the above categories. Many nonprofits opt for unique, quirky, and epic merchandise that stands out and turns heads.
At the end of the day, it all comes down to your niche and mission. Here are some other authentic product ideas depending on your target audience.
Check out print-on-demand statistics to identify the top products, colors, and designs to increase your chances of generating income.
Digital goods to sell for substantial revenue
Why digital goods? They’re low-cost, scalable, and can be delivered instantly. It’s a smart way for nonprofits to appeal to global audiences and generate revenue without inventory or shipping.
Here are some digital product ideas that can align directly with your organization’s mission:
- eBooks or guides. A mental health nonprofit could sell wellness workbooks, while a history preservation nonprofit might offer digital archives or local history eBooks.
- Printable art and posters. Designed by local artists or supporters, with proceeds supporting your mission.
- Online courses or webinars. Educational nonprofits can offer paid workshops that align with their programs.
- Downloadable planners, templates, or checklists. Perfect for productivity, advocacy, or educational organizations.
- Virtual event access. Sell tickets or VIP experiences for webinars, concerts, or online auctions directly related to your mission.
Generate income for your nonprofit by selling custom merchandise with Printify
Print on Demand for nonprofits is one of the easiest, risk-free ways to generate revenue and spread awareness for your cause.
With no upfront costs, no need to stock inventory, and zero logistical headaches, you can focus on your mission while reaching supporters everywhere.
Selling products this way also helps extend your nonprofit’s reach to a global audience, turning everyday items into income-generating tools and conversation starters that champion your mission.
Sign up and select your products
Register for a free Printify account and explore our Catalog of over 1,300 customizable items. Choose from a range of stickers, tote bags, t-shirts, hoodies, mugs, and even pet products to fit your nonprofit’s mission.
Design nonprofit merchandise
Upload your nonprofit’s logo and product design, or create something new using our free Product Creator. Add text, graphics, patterns, or use AI tools to design standout merchandise.
Make sure your design reflects your nonprofit’s mission, but keep it fun and wearable so your supporters are happy to proudly showcase it on social media platforms and in their communities.
Decide where to sell
With Printify, you can open an online merchandise store in minutes – no fees, no subscriptions, no coding. Our free Pop-Up Store lets you create a custom storefront with all your products. Use the shareable shop link to spread the word online and at community events.
Prefer other fundraising platforms? Printify integrates seamlessly with Etsy, Shopify, and other top sales channels, so you can sell where your supporters already shop.
Read the success story of how Stacey Runfola uses POD and online sales to raise colon cancer awareness and bring in funds for her NPO!
Raise money while Printify handles the rest
Focus on your mission and marketing efforts while we handle all the heavy lifting. Our global Print Providers will fulfill orders automatically and print, pack, and ship your merchandise to supporters worldwide.
Effective fundraising strategies
Let’s face it, bake sales and car washes aren’t going to cut it forever. If your nonprofit wants to generate income while staying true to its mission, it’s time to get creative, strategic, and maybe even a little quirky.
Here’s your roadmap to fundraising for successful revenue generation.
Diversify your income streams
To keep your nonprofit’s impact strong and sustainable, it’s smart to have multiple revenue-generating avenues. Relying on just one funding source, such as grants or donations, can leave you vulnerable to shifts in the economy or donor fatigue.
Here are some ideas to consider:
- Membership programs with exclusive perks. Turn one-time donors into lifelong supporters by offering memberships with early access to events, exclusive updates, discounts, digital downloads, webinars, or behind-the-scenes content.
Use tools like Patreon, WildApricot, or MemberPlanet to manage memberships.
- An online store selling branded merchandise. Selling products like t-shirts, totes, or eco-friendly goods generates income and spreads awareness for your cause.
Use platforms like Printify or Printful to sell nonprofit merchandise globally.
- Recurring donation campaigns. Monthly pledges create predictable income. Encourage supporters to give a small amount every month in exchange for shoutouts or small tokens of appreciation.
Use donation platforms like Donorbox or Givebutter.
- Ticketed events (virtual or in-person). Hosting ticketed events can boost both fundraising and community engagement. Keep it fresh with virtual classes, author readings, concerts, art shows, online auctions, or local fun runs.
Use Eventbrite or Hopin for seamless event ticketing.
Launch time-limited campaigns
Creating urgency is one of the most effective nonprofit marketing strategies. A one-week fundraising effort can often outperform ongoing campaigns because people are more motivated to act when there’s a deadline.
Here’s how to make it work:
- Seasonal campaigns. Tap into the giving spirit of the holidays (Thanksgiving, Earth Day, Mental Health Awareness Month) or seasonal moments (Back-to-School drives, Halloween).
- Giving Tuesday. This global generosity movement is a goldmine for nonprofits. Rally your community with matched donations, limited-edition products, or special events.
- Anniversary or milestone campaigns. Launch a “10 Years of Impact” fundraiser to celebrate your nonprofit’s mission.
- Limited-edition products or experiences. Sell exclusive items or offer virtual experiences (like meet-and-greets), available only during the campaign window.
Use countdown timers on your online store or social media to visually highlight urgency and drive clicks, donations, and sign-ups.
Want more inspo? Check out our crowdfunding for nonprofits guide and use our eCommerce calendar to keep up with important dates, holidays, and events throughout the year to earn big for your NPO.
Can nonprofits sell products: FAQ
Yes, nonprofits can sell things like custom merchandise or handmade goods to raise income for their cause. The key is to stay compliant – keep accurate records of your income-generating activities and consult a tax professional as your sales grow.
You may need to file an IRS Form 990-T if unrelated business income applies.
Yes, nonprofits can sell on Etsy. Here’s how to do it right:
- State your cause clearly in your shop bio. Mention you’re a nonprofit organization and how sales support your mission.
- Keep separate bookkeeping for product sales.
- Review Etsy’s seller policies and your state’s sales tax rules.
- Consider adding your 501(c)(3) status for transparency.
Definitely! You can sell items like t-shirts, mugs, or custom merchandise as part of your fundraising efforts or community outreach.
If your products directly support or promote your mission – like a music education nonprofit selling music-related tees – the income is usually tax-exempt. Keep an eye on your state’s sales tax requirements to stay compliant.
Yes, but there are specific parameters. A nonprofit can run business activities if it furthers its mission, like a theater nonprofit running a ticketed performance.
If the business is purely for profit and unrelated to your mission, it may be taxed or could even endanger your tax-exempt status. Consult a professional before launching.
It can, but not always. Occasional fundraising efforts (like selling event t-shirts) typically don’t jeopardize your tax-exempt status. But if selling becomes your main revenue stream and isn’t tied to your mission, it could trigger unrelated business income tax (UBIT).
Always monitor your sales and report income that’s not exempt.
There’s no strict dollar limit on revenue, but the IRS looks at whether your income-generating activities are regularly carried out and directly related to your mission.
An online store selling mission-aligned merch (like awareness shirts for a health nonprofit) usually qualifies.
But if you’re running a year-round shop full of unrelated items just to raise funds, that revenue could be subject to Unrelated Business Income Tax (UBIT) or even put your tax-exempt status at risk.
In conclusion
Can a nonprofit sell products? With the right approach, absolutely. Many nonprofits successfully generate income through creative fundraising efforts like merchandise, events, or digital goods.
Just be mindful – if your sales are not directly related to your nonprofit’s mission, you could face unrelated business income tax and risk having your NPO’s tax-exempt status revoked.
Stay informed about tax regulations and tax laws to protect your organization, stay compliant, and keep making an impact.
