In this conversational guide, Vanessa and Ansonette discuss how nonprofits can diversify income beyond traditional grants and fundraisers by creating mission‑aligned for‑profit ventures. They explore examples such as retail stores, video and dollar stores, cat cafés, franchise janitorial services, and merchandise sales, emphasizing the need for activities to support the nonprofit’s mission. The dialogue highlights critical tax and legal considerations, noting that a nonprofit may own a for‑profit entity but must ensure compliance with IRS rules and consult a tax accountant. Operational challenges of running two businesses are addressed, with advice to leverage client involvement for staffing and skill development. Real‑world case studies—including Goodwill, Salvation Army, Habitat for Humanity, YMCA, and an IKEA‑style nonprofit store—illustrate successful models. The speakers encourage careful cost‑benefit analysis, alignment with mission, and strategic planning before launching revenue‑generating ventures.
Chapters
raise money to generate revenue for your nonprofit. We're always thinking about getting grants, doing fundraisers and things along that line, but there's so many other ways to generate revenue for your nonprofit, like creating a for-profit entity or venture to raise money.
Yes, yes. And we have a good example of that. IKEA is a nonprofit that owns a store, and they use the profits from the store to support scholarships and and things like that for the students who come through and create some of the furniture that is sold in the IKEA store.
So yes, absolutely, absolutely. And I think that's what we need to really hone in from too, because in this day and age we need to have different streams of income and not just always depend on the community, because we are a business and we're like, we want to, we want to, you know, help others with our business. And then there's so many different ways. You look at Goodwill Goodwill is one that, that they're, they're doing it for the goodwill of their, the community too. They have the store, but they also have a training program, and they also are selling stuff and hiring people, right, to do the work. Yeah. And that's one of the things when you start, when you're— if you create a business for your nonprofit, you want to make sure that it aligns with your nonprofit, with the mission of your nonprofit. You want to make sure that you're not just saying, I'm going to start this business because I want this business to go into this money go into my organization, and the IRS may be like, well, that's just a business, so everything that you make over on your business is going to be taxable. Okay, right. So we don't want to give you any, any tax information. We want you to— everything that we say, go back and talk to your tax accountant on how you can really set up your nonprofit and how you can have a for-profit component. So some of the things that we've done in the past, that we've had— this is back in the day— we had a video store. So our video store, we used to hire our clients our clients would work there, we would teach them different skills, you know, basic skills. It's like alphabetizing all the videos, working a cash register, doing accounting, sales, things along that line. So it works within our mission to provide life skills trainings and educational trainings for our clients.
Yeah. So, and I'm also thinking that if you have a specific thing that you do within your nonprofit, you can monetize that. Offer it as a, you know, um, make— offer it for sale. Am I saying that correctly? Well, you can monetize it, and then that could be, um, how you bring in revenue also for the nonprofit. Now, can you do that, Vanessa, without having to like actually create a whole new business?
Absolutely. You don't— if at all possible, you don't want to create a whole new business, but you want to make sure that it's definitely in line with your nonprofit status. You don't want to say, oh, okay, we're going to have a coffee shop, but that coffee shop isn't benefiting anybody but the public. Was not benefiting your, your community, is not benefiting your staff or any of the clients that's coming into your program. You can't just be looking like a another coffee shop? If so, then you need a separate entity. However, if it's, if it's working with your clients like Goodwill is doing, you know, you don't need another entity. Like, there's sometimes there's nonprofits that sell their t-shirts, you know, may come up with— they have a good slogan or a good thing, they may sell those, but it's not something that they're doing year-round, right?
Right.
And so you can definitely use your products.
That sounds good. So that's another thing, another, uh, stream of income could be um, swag, creating, you know, swag. But I'm gonna just say that's harder to sell if people don't know who you are. Absolutely. Yeah. So, you know, so it's probably a better idea to create something where there's an actual program that matches what your nonprofit is all about. So I remember we helped the lady get her— um, she was writing grants because she wanted to provide, um, foster care for cats. And, um, so what she could do is she could open up a coffee shop that actually has, uh, cats in the coffee shop. So I forget what they call them now, but they're like cat cafes. And, you know, and as people come in, they have the, the cats there. They can adopt the cats. They can just sit among the cats and, and pet them or whatever and, and have their coffee. Then her coffee shop matches her nonprofit.
Absolutely, absolutely. And then she can go even, even deeper and say she provided that as a therapeutic environment, right? So she can take that— if she provides trauma, she can have her clients and people come in to get therapy, you know. And if you, if you have any skills, like Ansonette was saying, like if you're a counselor or a therapist, or if you, you can take that and you can monetize that. You can have your, your for-profit component and you could have a non-profit component, you know. You want to have, you have a fee, a fee schedule for people who have a lot of enough money to pay for your services, and then those who don't have. And so those are good. And then also you could take that and you can provide training. If you train anything, specialize in anything, you can monetize that. So you definitely want to monetize what it is that you're doing.
Yeah, you want to think of those, um, those unique skills that you have and then think of ways that you can take those unique skills and make them not only benefit you but and the community and your nonprofit, but benefit, um, the people that you serve.
Yes. And then also remember this though, Starting a nonprofit is a lot of work. Running a nonprofit is a lot of work, and there's, there's a lot of components to it. So when you set out to start another business to support your nonprofit, you're running two businesses. So that's a whole lot of work. So you really want to focus on your mission. So if you're thinking about starting and looking at ways to generate revenue in a for-profit manner, you want to look at finding definitely how it streamlines within your nonprofit, because it's a lot of work. With the video store we had, we also had a dollar store, we did the same thing. It was a lot of work because we had to not only staff our treatment facility ability, but we also had to staff our dollar store and our video store. And you have the same problems. How am I going to get employees? Are they going to come to work today? Who's going to do this? Who's going— so you really want to think about, are you really prepared to start a whole new venture? Okay, I will look at starting something with the clients. Like, say for instance, you know, there's so many— this is an idea— there's so many those little, like, Cricuts. Like, we make our own t-shirts, or you make your hats. You can create um, a, a store where you can print that for other people. You can print other people's t-shirts because there's a lot of nonprofits in the community that just maybe want 5 or 10 t-shirts, or other businesses. You can do a small— that on a small venue, and then have your clients— if you have clients right now— and be the one that produces them. So they're learning these skills, and in turn you're teaching them how to become entrepreneurs and what it is that they can do. So always when you look at— look at what can benefit your clients, so you can do your for-profit and your nonprofit together, and it aligns with your mission. So before you do it, I want you to make sure you please talk to a tax accountant so you make sure you don't get in trouble. Because if you do it wrong, and you can have to pay taxes on it, and you can also be at risk of losing your nonprofit status. And remember this again, a nonprofit can own a for-profit, but a for-profit cannot own a nonprofit organization. So all we're saying is make sure you do your homework, but There are so many successful businesses that are generating income. Habitat for Humanity, right? Uh, YMCA. The YMCA is making money off the memberships to their gym and also some training that they're doing. So take a look at some of the other nonprofits and see what they're doing before you step onto this venture and weigh the cost and the time.
Yeah, Salvation Army is another one, and Goodwill you already mentioned. So just to throw those in.
Yeah. Yes, and they can buy a franchise. You know, you can get like— if you do want to do training for returning citizens, you maybe can get a, um, a JAMPO, JAMPRO franchise, and have them do janitorial service. So there's so many things that you could do when you're building your nonprofit. Don't think outside the box, think like there is no box, right? Doing it and do it, but always stop, learn, weigh the cost before you jump into it. All right, so thank you, and I hope this is beneficial for you. If you like the information we get— we gave you, click the link below or click the QR code to find out more about what we're doing in the Nonprofit Founders Club. And nonprofits, keep rocking the world. We love you.
