Can a 501c3 Sell Products?

Nonprofit Organizations Selling Products

A 501c3 can sell products related to its mission to fund nonprofit programs and benefit the organization.

Generating Income for Nonprofits

Nonprofits can engage in income-generating activities by selling merchandise or setting up hybrid relationships with for-profit entities.

Unrelated Business Income Tax

Income-generating activities unrelated to a nonprofit’s exempt purposes may be subject to unrelated business income tax at the corporate tax rate.

Some non-profits run social enterprises, selling products or services to support their mission.

Pricing and Selling Products

Nonprofit merchandise sales pricing should aim for a profit margin of approximately 30-50% per item.

Nonprofits can sell products online on platforms like Etsy for tax-deductible organizations.

Amazon for Nonprofits

Nonprofits can sell products on Amazon without needing a business license. AmazonSmile donates 0.5% of eligible purchases to a chosen charity.

Amazon offers nonprofit-exclusive pricing and donation programs, such as the AmazonSmile Foundation.

Selling Wholesale Products on Amazon

Selling wholesale products on Amazon may require a business license and sales tax permit from brands, wholesalers, or distributors.

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