Profits for nonprofits?
Is a nonprofit permitted to earn a profit and still retain its nonprofit status? Yes, as long as it adheres to guidelines set forth by the Internal Revenue Service and as long as the extra money is invested back into the organization. It’s a myth that your 501(c)(3) nonprofit organization can’t make a profit. A nonprofit should have enough money equal to or greater than its expenses plus a reasonable amount saved as a cushion.
According to IRS website
Even though an organization is recognized as tax exempt, it still may be liable for tax on its unrelated business income. For most organizations, unrelated business income is income from a trade or business, regularly carried on, that is not substantially related to the charitable, educational, or other purpose that is the basis of the organization’s exemption.
Spending more than it makes is not ideal an ideal situation for any organization. Having a deficit is acceptable in the formative years and is common, but a deficit that persists for multiple years is cause for concern about the organization’s sustainability.
Different provisions allow the excess of revenues over expenditures to be applied in different ways, but the commonality is that they must all accrue to the good of the cause for which the organization was incorporated, be that the activities of a fraternal society, the societal benefit of a charity, etc.