If you volunteer at, want to start, or improve a nonprofit organization, you must find an answer to a critical question at the heart of the mission – how do nonprofits make money?
Finding stable funding for your nonprofit activities will take some creativity and elbow grease. However, anyone determined to turn their non-profit into a powerful force for change can absolutely reach fundraising success.
There are multiple solutions to significantly increase your nonprofit’s funds. In this article, we’ll provide tips and profitable ideas for non-profits to make money effectively.
Key takeaways
- To maintain financial stability, nonprofit organizations can earn money through various methods, such as donations, selling products, offering services, hosting fundraising events, and applying for grants.
- While nonprofits are mission-driven and not profit-oriented, generating income is essential to fund operations, pay staff, and do activities that align with their mission.
- Successful nonprofits invest in marketing and fundraising strategies to attract donors, increase membership, and build partnerships, ensuring continuous support for their cause.
- Nonprofits can qualify for tax-exempt status, which has significant financial benefits. However, they must follow specific regulations and reporting requirements, such as the IRS’s 501(c)(3) guidelines in the United States.
- Establishing long-term relationships and corporate sponsorships with businesses that share similar values can provide stable funding and enhance the nonprofit’s ability to achieve its goals.
What is a nonprofit organization?
As the name suggests – a non-profit is an organization that has set a goal other than generating profit.
Whether rescuing kittens from the street or saving the planet from plastic waste, nonprofits unite countless activists and volunteers with a shared mission to do good in their community and beyond.
Although nonprofit organizations aren’t specifically created for the purpose of generating income, they still need ways to earn revenue to organize fundraising campaigns, establish a reserve fund, pay fair compensation to their staff and contractors, and cover all other expenses tied to their organization’s purpose.
The good news is that there are countless ways to make sure your nonprofit’s earned income is stable and growing.
Nonprofits vs for-profit companies
To keep it simple – a for-profit benefits private interests, while a nonprofit benefits a cause.
Although the goals often differ, practices frequently overlap because both nonprofits and for-profit businesses require funds to function.
This table further clarifies the main differences and similarities between these two types of organizations:
| Non-profits | For-profit | |
|---|---|---|
| Goal | To aid a social or charitable cause. | To earn money and maximize profit. |
| Source of revenue | Donations, memberships, subscriptions, grants, sales of products and services. | Commercial activities, investments, memberships, subscriptions. |
| Profit distribution | Funding activities are tied to the organization’s mission, employee salaries, and operational expenses. | Shareholder payouts, reinvesting back into the business, employee salaries, and operational expenses. |
Make it happen today!
How do nonprofit organizations make money?
Compared to for-profit organizations, nonprofits have limited income options, but they can generate revenue to cover expenses and support their mission in several ways. Many nonprofits earn money through a mix of activities rather than relying on just one method.
Selling products
Nonprofit organizations can earn from selling products that align with their mission – who wouldn’t want to wear something great that’s benefited a cause they believe in?
- Place your nonprofit’s logo or slogan on merch like t-shirts, totes, and mugs. Consider offering eco-friendly products that your supporters can buy and wear to spread awareness of your cause in sustainable style.
Set up a shop with Printify to start making money for your nonprofit by selling customizable merch that supports your cause.
When selling products, make sure your sales comply with IRS rules and keep accurate records for your tax returns to maintain your nonprofit’s tax-exempt status.
Check out our dropshipping profit margins review to develop a pricing strategy that provides a steady nonprofit income.
Offering services
Like for-profits, nonprofits make money from offering their time and resources as various services related to their mission.
These can be educational workshops or consulting services that provide steady revenue streams while promoting your nonprofit cause. Offering these services can be a powerful tool for ensuring your nonprofit has enough money to sustain its activities.
Fundraising events
Fundraising is one of the most popular ways nonprofits make money and expand their list of supporters.
Sponsor and host fundraising activities, from on-site gatherings to online crowdfunding, and consider incorporating ticket sales to increase your net earnings.
Sell tickets for events like charity dinners, concerts, or workshops to engage more supporters and generate additional funds. As always, make sure all of these activities align with your nonprofit’s objectives.
Success depends on reaching the right people with the right message, so you’ll need a plan and an established marketing strategy to attract your desired audience.
To find popular fundraising ideas and some much-needed inspiration, check out our blog posts on the 30 Best Fundraising Tactics and 7 T-Shirt Fundraising Ideas.
Donations
Unlike for-profit companies, public charities and similar nonprofit organizations often rely on charitable donations to fund basic operations and larger projects. In addition to cash contributions, in-kind donations – such as goods and services – can also significantly support a nonprofit’s needs.
Collect donations from individuals, businesses, and even government entities through fundraising events, provide donation boxes at your locations, and establish easily accessible online donation options like a Donate button on your website.
Memberships
Your supporters may prefer to pay a membership fee rather than offer volunteer hours. So, why not provide them with a membership program?
Consider offering memberships on an annual basis with different levels of support, each offering its own benefits and privileges to inspire more people to sign up and give to your nonprofit.
This can start with access to a members-only newsletter, a digital or printed thank-you card, and then increase to exclusive merch and VIP event passes.
Offering memberships can generate positive revenue and provide a steady income stream for your nonprofit.
To simplify running a successful membership program, use membership management software or services like DonorBox or WildApricot.
Grants
Due to the large sums of money involved and the competitive grant application process, this is one of the hardest ways to gain funding for your nonprofit. However, it’s undoubtedly worth it.
Apply to receive grants from government entities or private foundations to carry out various projects that align with your nonprofit’s goals and mission.
Some organizations also offer grants to nonprofits, so it’s important to research opportunities thoroughly.
Consider applying for Google Ads Grants, and if you’re in the US, the federal government provides a handy search tool that makes it easy to find grants that best fit your nonprofit organization’s goals.
Corporate sponsorships
Gaining corporate sponsorships can provide stable funding for nonprofit activities through long-term partnerships.
Establishing strategic relationships with businesses that reflect your values takes dedication, effort, and a deep understanding of the other party’s goals and expectations. You’ll need to build a compelling sales pitch, showing what they’ll gain and achieve from sponsoring your nonprofit.
What are the main expenses for a non-profit organization?
Expenses vary depending on the nonprofit organization’s size, scope, and mission, but many nonprofits allocate their funds in a few common areas.
Operating costs
Reserve a set amount to cover the essential operating expenses that keep your nonprofit running smoothly. This means covering
- Rent for office space
- Property taxes
- Utilities
- Technology
- Day-to-day office supplies
A big part of your operational expenses will be marketing through social media campaigns, email newsletters, and strategic partnerships with corporate sponsors to get more funds.
Focus on creating quality content through blog entries, videos, and infographics to highlight your organization’s impact and attract donors and future members. Check out our marketing hints and tricks to find the best ideas.
Organizing fundraising
Your nonprofit must set money aside for effective fundraising so you can afford all those great programs and initiatives.
Here are some potential costs:
- Event space or venue rental: Venue rental, such as a hall, park, or conference room. If you’re throwing a digital event, you may have platform fees.
- Catering and refreshments: Food and drinks are often expected at fundraising events, and depending on the scale and location, they can cost quite a bit.
- Merchandise: Branded merchandise, like t-shirts or tote bags for giveaways and additional fundraising tools. We recommend using Print on Demand through Printify for the lowest prices possible.
- Marketing and promotion: Social media ads, printed flyers, or email marketing campaigns.
- Event supplies and equipment: Sound systems, tables, chairs, tents, or AV setups.
- Staffing and volunteer costs: While volunteers are a great resource, you might still need to cover some expenses, like transportation, t-shirts, or even professional services like a photographer or event manager.
Plan and budget for these expenses to maximize the impact of your fundraising efforts and avoid getting consumed by the cost of the event itself.
Staff salaries
Investing in a dedicated team of enthusiasts, including both nonprofit employees and volunteer labor, is key to your nonprofit’s success.
While relying on volunteers is common, it’s important to consider transitioning to a fully paid staff as your organization grows. When the opportunity arises, offer reasonable compensation, at least meeting the minimum wage, to your nonprofit staff members who work tirelessly to drive your organization forward.
In addition to your nonprofit employees’ salaries, provide ongoing training and professional development opportunities to keep your nonprofit competitive and your staff members energized.
Impactful campaigns
Campaigns are great for promoting your nonprofit’s mission but come with significant costs.
Some are a few areas you’ll need to invest in:
- Marketing and advertising: Paid ads on social media, Google, or traditional media.
- Content creation: High-quality videos, photos, and graphics
- Campaign materials: Flyers, brochures, or digital materials like emails and social media posts.
- Technology and tools: Subscriptions to CRM systems, email platforms, and analytics tools.
- Event costs: Venue rentals, equipment, or platform fees.
Invest in these areas to make professional, far-reaching, and impactful campaigns.
Nonprofit organizations and tax-exempt status
Many nonprofit organizations receive tax-exempt status from government agencies in countries where they hold operations. In the United States, a tax exemption is issued by the Internal Revenue Service.
To qualify, you’ll need to meet the conditions set out in the tax code, specifically under the Internal Revenue Code section 501(c)(3). But before taking a deep dive into tax regulations, make sure your nonprofit meets the following conditions:
- It’s a charitable, scientific, literary, educational, or religious organization.
- Has a democratically-elected governing body.
- Created for the good of public interests, not for private benefit.
- Has clear rules outlining the organization’s purpose and its operational framework.
If you register a nonprofit in the US and meet all of the requirements set out by the IRS, you’ll receive a status that provides an exemption from federal taxes and other tax deductions. However, it’s important to note that a nonprofit organization must not operate like a for-profit corporation and should strictly adhere to its stated mission to keep tax-exempt status.
When your nonprofit makes money from unrelated activities not directly tied to your mission, you’ll need to pay taxes. In this case, you’ll deal with the unrelated business income tax.
File Form 990-T annually to maintain your tax-exempt status if you earn $1,000 in gross income from unrelated business activities.
You’ll also need to pay the estimated tax if you anticipate the tax to reach or go over $500 in the span of a year. Unrelated business income regulations may differ by country, so you’ll need to check the rules and regulations of your specific country of operation.
How does a nonprofit make money with Print on Demand?
Now that you’ve learned how to make money as a nonprofit, let’s go over how you can start earning by selling custom merch with Printify.
Sign up
Unlike drafting a nonprofit mission statement or paying taxes, opening an account on Printify only takes a few clicks, and most importantly, it’s free.
Create custom products
Go through our Catalog of over 900 customizable products to find the right ones for your nonprofit to sell.
Use our Product Creator to upload or create your own designs using our free graphics library, text editor with more than 300 fonts, pattern creator tool, AI Image Generator, and Shutterstock integration with millions of images at your fingertips.
Take inspiration from our blog, T-Shirts for a Cause, and remember to add your nonprofit logo or slogan to the merch.
Decide where to sell
Order in bulk to sell merchandise at your location or during fundraising activities. Alternatively, open a store on an eCommerce marketplace or platform.
Start selling products fast through the Printify Pop-Up Store, or check out our automated integrations, including some of today’s most popular sales channels.
Check out the best nonprofit fundraising platforms.
Promote your products
It’s time for the most important step – selling merchandise!
- Order samples to check that the quality meets your standards. Go to the top of your Printify dashboard → Orders → Create order → Sample.
Promote your merchandise through channels like your website, social media platforms, email newsletters, and on-site events.
Engage with your community by encouraging them to share photos of themselves using or wearing your products, and consider running contests or merch giveaways to grow your following.
Read our insider nonprofit marketing tips for driving traffic to your store.
FAQ
Yes, nonprofits can make money, but with specific intentions. They don’t make a profit in the traditional sense since their primary goal is to create a positive impact in society, not generate revenue.
Funds are typically raised through donations, grants, membership fees, and merch sales. They’re then used to support the organization’s mission and activities rather than distributing profits to board members or shareholders. But, of course, nonprofits do have paid staff and an executive director who receive fair compensation.
A 501(c)(3) organization is a specific type of nonprofit in the US that qualifies for tax-exempt status by the IRS.
Most commonly, it’s a charitable, scientific, literary, educational, or religious organization that benefits society instead of individual interests.
That depends on the structure of your nonprofit and what they’re tasked to do, but usually they don’t get paid the same way as in for-profit organizations.
Most of the money raised or earned, including net earnings, must go towards fulfilling the nonprofit’s mission. It pays for relevant day-to-day expenses, offers reasonable compensation to your staff, and takes care of funding and hosting events and other projects and initiatives.
That said, there are instances where, depending on the decision the board makes, nonprofit founders and executive directors go beyond a seat on the board and get hired to work for the nonprofit in a leadership role.
Final thoughts
So, how can nonprofits make money? The answer lies in earning through diverse income streams. Funding is the core of all successful nonprofit organizations. From membership fees and in-kind donations to individual donations and government grants, remember that each contribution counts towards supporting your cause.
Gaining and distributing earned income with methods that align with your nonprofit’s values will support financial sustainability, allowing you to grow your organization and reach closer to achieving your goals.
With Printify, you can pave the way for a better future – one filled with hope, compassion, and custom-printed merch. Get started today!
