How Do Nonprofit Organizations Make Money: 5 Secrets Nobody Knows

In this article, we’re sharing how do nonprofit organizations make money and how running a non-profit organization can put cash in your pocket.

You’ve got to be careful when you’re trying to profit off of a non-profit organization. The whole purpose of being non-profit is that you’re taking the money people to give to you and putting it to good use. You are allowed to use a portion of that money to pay yourself and anyone who works for you.

Not all of the money has to be used towards its intended purposes. People know that it costs money to run a charity and they understand when you have expenses.

No one expects you to work for free, and that’s why it’s possible to carve out a living while you’re operating a non-profit organization.

Here are 5 lucrative ways of how do nonprofit organizations make money.

1. Earn a Salary While Running Your Non-Profit

Earn a Salary While Running Your Non-Profit

No one expects you or your staff to labor all day long, helping others for free. You need to live as everyone else does. You don’t want to give yourself or your staff a salary that’s so high that people start to become suspicious.

Anyone who donates money to you has a right to question how you’re spending it. It’s not out of the realm of possibilities that you could earn six figures running a charity.

If you were to start to siphon off millions for yourself, then that would look sketchy. There has to be a balance, so people don’t think that you’re trying to take advantage of them.

The amount that you and those who work for you earn needs to be in proportion to the amount you receive. If you’re receiving millions of dollars per year in donations, then it might be feasible to pay yourself a low to mid-six-figure income.

You’re doing something right to bring in all that money, and your efforts do need to be rewarded. Anyone capable of bringing in such large amounts of money needs to be shown the appreciation they deserve.

Anyone who has ever run a charity that brings in several million dollars a year knows that it’s not easy. It takes work every day to make the connections possible to bring in the kind of donations that can earn someone six figures.

2. Allow The Organization to Pay for Your Travel

All of your travel expenses are covered by the non-profit. That means your transportation and hotels are covered.

The key thing that you’re going to want to do is to make sure that your travels are related to your charity. That means you should skip the Miami beach vacation and keep it all business. That doesn’t mean you’re not allowed to have some fun while you’re on the road.

No one will tell you that you can’t enjoy the world-famous all you can eat buffets in Las Vegas. Don’t expect your non-profit to foot the bill while you’re at the blackjack table.

Use a little common sense and ask yourself what other people will tolerate. A moderate amount of sightseeing while during your downtime is also acceptable, but don’t overdo it.

3. All of Your Meals Can Be Paid For

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You are expected to eat while you work. Again, just a little caution when you’re deciding what to eat. It would be best if you set up a kitchen in your office space so you and others can prepare your own food.

Don’t expect donors to foot the bill for lavish caviar dinners with overflowing glasses of champagne. Can you go out to eat at restaurants? Sure, but stay on a tight budget and don’t go overboard and eat the average person can’t afford.

No one will donate money to you if they feel like you’re wasting it on fancy restaurants. Always try your best to stay as modest-looking as possible, and that goes for your restaurant choices as well.

4. Your Rent or Mortgage Can Be Covered by the Non-Profit Organization

The charity can pay the home you live in. It’s all about appearance, and you don’t want to live in an expensive condominium or a mansion. Ask yourself if your house or apartment seems appropriate.

If you draw too much attention to yourself, then people are going to start asking questions. No one will say anything if you’re living in a suburban area in a house like everyone else.

The key thing is to blend in and not go over the top. If you stick out like a sore thumb, then people are going to tell others not to donate money to your non-profit.

5. Deposit Money Into Your Retirement Accounts Using Proceeds From the Non-Profit Organization

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Just because you run a non-profit doesn’t mean you’re not allowed to retire. The charity can match your 401k and other contributions. Planning for your retirement is essential, and not doing so isn’t acceptable.

Should you allow the charity to max out your contributions?

It depends on how much money you’re bringing in. You’ll probably find that it’s best to stay under the radar and to provide yourself with a modest retirement plan.

Remember, you can set aside some of your salaries and put it towards retirement as well.

Bonus Tip: Always Stay Within the Law

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The government will always scrutinize your non-profit status. They will go through everything you do with a fine-tooth comb. The donors aren’t the only people you need to worry about. Every expenditure needs to be accounted for, and it has to make sense by those who are looking at what you’re doing.

Watch how the money is being dispersed amongst you and those who work for you. Don’t do anything that would cause any red flags to come up.

You are expected to make a living running a charity and that living can be quite nice if you’re bringing in lots of money. Whatever you do, don’t bring attention to yourself by living a lavish lifestyle.

Final Words

Perception is everything in the world of non-profit organizations. You’ve more than likely heard about the ministers who fly in private jets and live in a mansion. Don’t be like those people.

If you’re making good money from running your charity, don’t rub it in the face of others. Always be modest and humble, and you’ll find that this attitude will go a long way in convincing people to donate more money.

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