For-profit subsidiaries – Create your own funding source

Description

Abstract: To be less dependent on others for their survival, nonprofits could consider forming their own for-profit subsidiary. Avoiding unrelated business income is the top reason why not-for-profits create a for-profit enterprise — but such enterprises can also offer greater flexibility on issues such as compensation and access to financing. Yet, as this article explains, establishing a separate entity has its own costs and complexities, such as management, personnel, tax, audit and other requirements.