Some government contracts explicitly prohibit not-for-profit organizations from "profiting" from a grant. In other words, if there is any leftover funding from a government grant, the organization cannot keep it.Prevention/Solution
Not-for-profits bring in revenue washed-up private donations, fees for services, sale of products, consequence on investments or with control grants and contracts. What percentage a specific not-for-profit receives from a specific source varies widely, depending on the earth of the organization. Some not-for-profits rely heavily on government grants while others do not use them at all. Not-for-profits can certainly make "profits," but they do not distribute that money to shareholders. Instead, the money is reinvested into the organization's growth and services.
Government Contracts
When a not-for-profit organization contracts with the government to supply some service, it has very strict reporting requirements regarding how the money is spent and how effective the government-funded services are.No-for-profit organizations can produce profits, with limitations.Yet when designated as "not-for-profit," such a business can beget a Income on the other hand is restricted on the uses of the profits. Control contracts and grants exclusively can edge a not-for-profit constitution's options.
Identification
Not-for-profits can be creative about what to do with leftover funding from government grants. For instance, they may be able to set up a "reserve" fund that they can get the organization's future. Not-for-profits can discuss their options with the government agencies with which they contract.
