Can a non profit organization make a profit ?

Question

I work at a non profit organization. in the cafeteria they sell 25 cent bags of chips for one dollar. they sell bottles of soda for 1.25 and fund raiser candy for a dollar. seems like profit making to me, also the company gets free cakes rolls and bagles from a factory and sells them,

Answer 1

Yes, a nonprofit can make a profit. Sounds like this nonprofit is doing a very good job of generating income, and this is a sound, healthy practice, because it means that it doesn't have to rely only on grants and donations to pay salaries, pay rent, buy equipment, pay utilities, etc. The profits, however, can't be used to pay the board of directors (who are all volunteers -- unpaid staff); the money can be used for salaries for employees, but not profit-sharing.  

Answer 2

Beside the 25 cent bag of chips they also need to pay salaries for all employees, benefits (where applicable), overhead expenses such as fuel and electric, repairs and maintenance for building, any finance costs for the building construction or necessary renvovation, insurance, telephone adminstrative overhead etc.  

A not-for-profit organization can make a small profit but it needs to go back into services provided.

Answer 3

The question is, what do they do with the funds that they raise?  Do they go into the CEO's bank account?  If so, their non-profit status is bogus.  If they take this money and turn around and do charitable things with it, that's fine.  Every soup kitchen has to buy soup.  Workers at a homeless shelter need to pay their own rent.

It's even okay for them to sock away some of this in the bank, for future projects.  They are going to need a new furnace some day, it's okay for them to save up for it.  What matters is where those funds ultimately go.