Building on “Newman’s Own” Recipe for Charity: What Else is on the Menu?
May a Section 501(c)(3) nonprofit engage in business operations to generate revenue? Such organizations often brainstorm creative solutions to accomplish their charitable purposes and ensure revenue is sufficient to support their charitable endeavors, including business-related ideas. These activities may blur the lines between a nonprofit organization engaging in permissible commercial activity, on the one hand, and a de facto for-profit business with charitable overtones. How does a Section 501(c)(3) stay tax-exempt within applicable IRS constraints, and yet carry on a profit-generating business? The “Newman’s Own” exception provides a fascinating example of charity mixed with business, within the broader context of other more common and far less complex nonprofit operational models.