Selling thru Non-Profit Organizations

[Guest guest]

Dear Narasimha,

I did a cursory search in the web as to whether

non-profit organizations can sell items.

and I appending below this mail what i found.

Hope this can be of any help.

Regards

S.Prabhakaran

 

http://www.nonprofits.org/npofaq/11/02.html

 

Can I sell things for a profit and be tax-exempt?

 

Summary: Selling items does not risk an organization's tax-exempt

status if the revenue generated is used to promote the organization's

exempt function and the applicable taxes are paid on any unrelated

business income.

 

 

In July 2000, someone wrote to nonprofit (see

http://www.rain.org/mailman/listinfo/nonprofit):

 

 

I am looking for an answer, we are a nonprofit organization

supporting a skating team. We would like to sell a few items to

profit the fundraising efforts by buying from a wholesaler and

selling at a competitve retail price. Can we do this? All profits

will go back to the organization and they will be sold at a

fundraising table by volunteers

 

 

Tony Poderis (http://www.raise-funds.com) replied with these thoughts:

 

 

Yes, you certainly can sell commercial products to help support your

non-profit organization. There are many good collaborative

opportunities available with reputable vendors. When considering

selling those products, first ask yourself:

 

 

 

If we sell a product to help support our organization, will the time,

effort, and expense we put into it be justified relative to the net

profit?

 

 

Will we be certain that the selling program does not restrict nor

replace the far more effective and proven philanthropic process we

are --- or should be --- carrying out?

 

 

What plans (advance mailings, flyers, signage, etc.) can we develop

which will maximize our chances for real profit, recognizing the

limits of what we can do with a table display of products, and our

expectations that passersby --- especially those not knowing us ---

will stop and make purchases? When we attempt to sell to the general

public which does not know our organization, do we really believe we

will make a meaningful amount of money strictly due to the sale of a

commercial product otherwise competitively available in the

marketplace --- sold to persons having no relationship at all to our

organization?

 

 

If we sell to our regular donors, will we run the risk of annoying

them and perhaps losing or diminishing their regular charitable

support with yet another type of solicitation? Will they consider the

two transactions as truly separate issues? We must accept the fact

that, contrary to what the vendors selling commercial products to us

declare, our regular donors making product purchases will generally

regard their expenditures as primarily charitable support of our

organization --- regardless of their receipt of tangible goods.

 

When you do choose to sell a vendorís products to make money for your

organization, I suggest that between you and the vendor, the

following questions should be answered:

 

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