Nonprofit FAQs

Nonprofits + Profit

Can a nonprofit make a profit?

Operating any organization at a deficit or without a sufficient “rainy day” fund is not good business. In order to maintain the viability of any organization, it is important to operate with some “net revenue” at the end of a year. What distinguishes nonprofits is not whether they can make a profit, but what happens to profits. Nonprofits are prohibited from distributing profits in the same way for-profit corporations can. All revenue must be earmarked for the organization’s mission.

Excerpted from “What You Should Know About Nonprofits” a joint project of Board Source and Independent Sector .