Can my nonprofit charge for services or products?
Program service revenue, rent, and other ways to earn money
Submitted by Charitable Allies
There’s an understandably common misconception that nonprofit organizations are not permitted to make money. The truth is, nonprofits can and should bring in revenue. No money = no mission, and you’ll even want to make enough to have an emergency fund.
Donations and grants are an obvious source of funding for most nonprofits, but there are other, often overlooked ways to earn money. And if you’re looking for a nonprofit attorney to advise on your organization’s efforts to legally bring in revenue, let us know and we’d be happy to help.?
Program Service Revenue?
Program service revenue is when a nonprofit charges for a service directly related to its mission. It’s the second most common way nonprofits make an income after charitable gifts. Below are some examples of how nonprofits leverage program service revenue:
In each of the above examples, the organizations are carrying out their exempt purposes: finding forever homes for pets, providing an education to children, or bringing musical arts to a community. The revenue generated from these activities is exempt from income tax—which can make a huge difference over time.?
25 Ideas for nonprofits to bring in funding
This is not an exhaustive list, but a starting point to help get you thinking about ways your nonprofit can bring in revenue outside of traditional fundraising or grant writing.