Stanford Social Innovation Review

The term "earned income" covers a multitude of possibilities. Put broadly, it indicates almost any income which a nonprofit receives from sources other than contributions and grants. It is most commonly income from services provided or products sold. Many nonprofits (performing arts organizations, for example) generate substantial earned income, but a nonprofit with little or no earned income may want to evaluate ways to increase the amount of earned income it receives, in order to reduce its dependence on contributions and grants. See my ACT page for more information and an approach to evaluating a nonprofit's potential for generating earned income.