Stanford Social Innovation Review

Stanford Social Innovation Review is an award-winning magazine covering best strategies for nonprofits, foundations, and socially responsible businesses. Published quarterly by the Stanford Graduate School of Business.

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Tony Ramsden on Earned Income
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What does "earned income" mean in the nonprofit world?

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.

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Would the sale of a motorcycle be considered earned income?

»» Posted by: Linda on November 25, 2007 03:13 PM

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As a non-profit which donates farm production to hunger relief agencies, would the sale of part of the production to a restaurant be considered earned income? Would this income be considered unrelated business which would require filing for a 900-T?

»» Posted by: Leslie King Xep on November 22, 2008 03:37 PM

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