Knowledgebase

Can a nonprofit organization charge for its services?

Whether or not an organization charges for its services is not the measure of nonprofit status. Charging a fee is quite common in non-profit organizations. Fees can even exceed direct costs of a service provided the balance goes to fund other activities of the non-profit. All of the funds you raise, by whatever means, must be used to further the objectives you set out in your incorporation papers. In other words, none can be paid out as dividends, individual profit, etc. Board members in particular must not profit in any way from the organization. Often services cannot be provided for a reasonable fee; that is, a fee the intended consumers can afford. That's why most charities seek out grants and do other forms of fund-raising.

Jane Garthson
Garthson Leadership Centre