Nonprofits' pursuit of taxable revenues may impact charitable missions.
Nonprofit organizations can make money from activities that are taxable, even though they are usually tax-exempt. These activities bring in about $1.5 million on average. Some worry that focusing on these activities might distract nonprofits from their main charitable goals. However, research shows that nonprofits engage in taxable activities when they are profitable, the nonprofit itself is not doing well financially, and donors are less likely to object. This means that nonprofits only pursue certain taxable activities under specific conditions, which helps prevent them from straying too far from their main mission.