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October 29, 2021

Can a Nonprofit Sell T-Shirts in Arizona?

Nonprofit organizations work wonders for many causes, but they can’t do it for free. Finding effective ways to raise funds within the nonprofit rules and regulations isn’t always easy. Selling items with the nonprofit’s logo is an excellent solution, and it helps spread the organization’s message.

 

T-shirts remain one of the top items for many organizations because people love them. They are versatile, comfortable additions to any wardrobe, and you can get them in various sizes and colors. 

 

Selling shirts sounds like a perfect solution for raising money and spreading the message.  But, can a nonprofit sell t-shirts?

can a nonprofit sell t-shirts state forty eightHow Nonprofits Can Sell Merchandise

To understand how nonprofits can sell t-shirts, it helps to look at how the organizations work. Without getting too technical, nonprofits exist to support a cause that benefits the general public in some way. They qualify for certain tax exemptions because they don’t try to make a profit. 

 

Though the goal isn’t to generate money, nonprofits need to raise funds to cover their operating costs. Often, these funds come in the form of gifts, like a grant or donation. However, the gifts generally don’t cover all of the costs associated with day-to-day operations, including paying staff.

 

Nonprofits can hold events to help raise funds, but those activities also cost money. They have to rent a facility, decorate it, staff it, and provide refreshments at the minimum. As you can imagine, those costs add up fast. That’s why nonprofits can do other things to support their work, like sell goods.

A Few Caveats About Selling Merchandise

Without digging too deep into the technical aspects, there are a few things to consider before picking up nonprofit shirts to sell at your next event. The two main issues that separate nonprofits from for-profits are revenue and taxes.

 

First, while nonprofits work for a cause, not for money, they are not prohibited from generating more revenue than they need to cover their operational costs. However, that excess might be considered unrelated business income that is subject to taxation. Some of the guidelines used to determine whether or not income is taxable include:

 

  • The specifics of the case, the merchandise involved, and extraneous circumstances.
  • The reason for the nonprofit’s tax exemption.
  • How the nonprofit explains its tax exemption in the application and charter.
  • The size and scope of the activity in question.

 

That means a one-time event where an organization sells merchandise to raise awareness for an event or cause would look different from products sold regularly on the nonprofit’s website. 

 

Additionally, nonprofits have a unique position with sales tax. In Arizona, selling to a nonprofit is not tax-exempt. However, when a nonprofit makes a sale, it is usually sales tax exempt. Further, nonprofits can request a tax exemption for food and retail sales related to their mission.

Fundraising Idea: Shirts for Nonprofit Organizations

It is possible for nonprofits to establish relationships with for-profit companies to further their cause. For example, an organization could partner with a for-profit merchandising team to create nonprofit t-shirts to sell at a special event or as part of a campaign.

 

Several for-profit companies partner with nonprofit organizations to form collaborations that improve their community. It’s an excellent way for for-profit companies to give back to their communities, and it provides nonprofits with a new revenue stream. 

 

Plus, both organizations gain visibility in their communities and spread the word about a good cause. How does that work? Well, imagine this scenario.

 

A nonprofit organization helps animals in shelters. They partner with a merchandising company that makes custom t-shirts. The nonprofit decides to put on a 5K walk and run to raise money for the local animal shelter. Their partner creates t-shirts for the event that the nonprofit sells at the 5K. 

 

After selling several hundred of the nonprofit t-shirts to attendees, the organizations see people wearing them all over town. People ask where they got it for every person who wears the shirt, drawing attention to the event. They see the nonprofit and the for-profit companies represented on the shirt. 

 

Both organizations see an uptick in attention and business. Even better, the next 5K attracts even more attendees.

Finding the Right Partner for Your Nonprofit Merchandise

Selling merchandise is an excellent way for your nonprofit to cover costs and spread the word. Think about your mission and brainstorm what goods can best represent your goal, and spread your message. 

 

Once you have an idea about what you want, it’s time to find a partner to bring your ideas to life. Look for a partner that shares your values understands your position as a nonprofit organization, and can work with your vision to create quality merchandise.

About State Forty Eight

State Forty Eight is an Arizona-based initiative that strives to bring people together from across the state, including nonprofits, public agencies, businesses, and individuals. They offer screen printing and embroidery services, art and branding services and even have a foundation dedicated to the cause.

 

Their mission revolves around building a sense of community, expressions of pride, and inspiring people around Arizona. Part of that mission involves collaborations to help companies and organizations with fundraising and marketing.

 

State Forty Eight launched an initiative in 2019 known as State Forty Eight Community Impact. The initiative gave way to the State Forty Eight foundation that aims to invoke positive change throughout Arizona by supporting local organizations. 

 

  • They are building impactful partnerships to bring about unity and change in Arizona to create a better future for every community.
  • The foundation encourages and empowers the state’s youth by offering mentoring, workshops, and programming that teaches life and leadership skills. 
  • Entrepreneurship is near the heart of the foundation’s mission. The team provides educational opportunities and access to resources, like incubator organizations, to support budding entrepreneurs.

 

If you need shirts for a nonprofit organization, State Forty Eight can help. We live to support passions and community throughout our great state. So can a nonprofit sell t-shirts? Contact us to see how we can craft nonprofit shirts for your organization.