I am an employee of a nonprofit (501C3) museum that sells merchandise to help us expand our reach to the public.

My question is: If someone (an employee or guest) donates items for the museum to sell, can we do that?

For example, a local man brought us several of his books at no cost to us, with the intent of us selling them and collecting the proceeds to expand our reach. Does this violate our nonprofit status? He does not wish to be compensated for his donation.

Any other questions that might help with this, please let me know. Thanks!

2 Answers 2


Non-profits are allowed to make a profit, assuming that the activities and profits are in line with its non-profit intent.

Selling a donation to advance its non-profit public benefit is typically allowed, as in the case of charity auctions. For example, Goodwill's entire business model is selling donated clothes to fund its mission to help the disabled.

See the IRS for some more information on donated property for charitable organizations.

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    A nitpick: money that you take in from business activity and then reinvest in the business is revenue, but it's not profit. Non-profits are not allowed to have profits.
    – Cadence
    Commented Apr 28 at 3:46
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    @Cadence A non-profit is not operating with profit as a goal, but it may often take in more revenue than it spends, and that's a profit. If operated honestly, it should save this for later spending. But it could invest it so that it will have even more available to spend much later.
    – Barmar
    Commented Apr 28 at 12:31
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    @Barmar That's not profit, in the case of a non-profit. The money saved for future spending is considered an asset, typically an unrestricted asset. It's treated the same as unspent donor funds, and you don't call those profits. Non-profits cannot have profits.
    – user71659
    Commented Apr 28 at 17:41
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    I cleaned up the grammar. I want to upvote this answer, but it ought to say "revenue" since @Cadence is 100% correct; the "non-distribution constraint" is what it's called by insiders, and it is ironclad. Non-profits can get in trouble if they distribute a profit, but they are allowed to bank revenue for future plans or rainy days.
    – Corbin
    Commented Apr 28 at 19:15

Yes, nothing prevents you from selling it. Many museums offer things for sale to help the museum.

You need to properly document donations to a nonprofit though.

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