The Thing That Ate Your Mission

By Dylan Allen, Philanthropic Strategist with The Nonprofit Atlas

It always starts with something small.

A whisper of a good idea. A clever little way to bring in extra cash. Something harmless. Like a T-shirt.

You’re the executive director of a youth arts nonprofit. You live and breathe paint-stained smocks and the smell of glue sticks. The mission is your marrow. But one day, in the back of a staff meeting, someone says, “What if we sell merch?”

You nod. It sounds reasonable. Innocent, even.

That’s when the thing crawls in.

At first, it’s manageable. A few shirts on a table at an event. Then someone suggests a Shopify store. Next thing you know, you’re launching a brand. Facebook ads. Part-time fulfillment help. Someone even mutters the word “influencer.”

And suddenly, the thing has teeth.

It’s feeding now—not on your donors, but on your time, your team, your purpose. You’re chasing sales instead of student outcomes. It all looks so good in the ledger. So shiny. So clean.

But in the shadows, something else is watching.

The IRS Knows What You Did Last Fiscal Year

There’s a rule—an ancient one, buried in government code and dusty accounting manuals. It’s called Unrelated Business Income, or UBI. And it’s no campfire ghost story. It’s real. And it doesn’t care that you meant well.

The IRS doesn’t see your enthusiasm. It sees the numbers. And when your revenue starts acting like a business—walking like one, talking like one—it starts asking questions.

Is this part of your mission?
Does this activity serve the public, or just your bottom line?

If the answers are “not really” and “kind of,” you’ve wandered into dangerous woods.

And then comes its twisted cousin: UBIT—Unrelated Business Income Tax. Like a taxidermist with a badge, it doesn’t just stop you. It preserves the evidence. Form 990-T. Audits. Penalties. A revocation of your tax-exempt status—like being excommunicated from your own chapel.

That’s when the dream turns cold.

The Mission Drift

You didn’t mean to go off-course. But drift doesn’t need a villain. It just needs inattention.

That apparel store, those slick sponsorship deals, the rental income from that debt-financed venue—it all felt like growth. Until it started feeling like something else: dissonance. A board member frowns. A donor pulls out. A reporter asks a strange question.

You check your Form 990 and see it plain: your nonprofit has a second face now. One for the mission. And one for the money.

The real horror? You don’t remember when the switch happened.

How to Banish the Thing

You can fight it. But only with clarity. With intention. Here’s your arsenal:

• Ask the hard question: Does this make our mission stronger—or just our budget?
• Track the unrelated: Monitor how much UBI you’re bringing in and how often. Keep it under 20%, or better, don’t let it take root at all.
• Use your ghost army: Volunteer-led efforts and donated goods are mostly immune.
• Don’t call it advertising: Sponsorships that come with perks? That’s how UBIT finds the scent.
• Contain the beast: If you must go big, create a for-profit subsidiary and lock the door behind it.

Because what you’re protecting isn’t just your tax status. It’s your soul.

The Final Scene

Your nonprofit exists because the world needs something only you can give. Don’t let it be devoured by clever ideas that wandered too far from the light.

Revenue is a tool. The mission is the fire. And if you forget which one fuels which, you’ll wake up in a house that looks like yours but feels… wrong.

So check your ledgers. Read your bylaws. Light a candle. Because compliance isn’t red tape.

It’s an exorcism.

Thanks to our (pretend) contributor, Steven King… and maybe some AI…