Does setting up a subsidiary for-profit business make sense for your nonprofit?
Earning income for a nonprofit is key when considering how the competitive landscape for grants limits income potential. If nonprofits figure out how to earn income through a for-profit entity and to compete in the open market for customers, the nonprofit will realize the greater revenue potential and expanded capacity to do more mission-driven work. However, it is important to engage a tax professional and an attorney to help structure a for-profit subsidiary managed by a nonprofit.