No, participating in an affiliate program does not automatically endanger the church’s tax-exempt status. As long as the affiliate activities are aligned with the church’s mission or kept to a modest level, the church can confidently participate without risking its 501(c)(3) status. The key is to choose mission-aligned programs and keep unrelated income as a small portion of total revenue.

There is very little risk, provided the church structures income-generating activities properly. The IRS only raises concerns if non-mission-related income becomes substantial or if these activities dominate the church’s focus. By carefully selecting programs that align with the church’s goals and keeping unrelated activities minor, the church stays in compliance and protects its tax-exempt status.

The church can maintain compliance with IRS rules on UBI by keeping unrelated business activities minimal and tracking any unrelated income separately. Most importantly, if the income is mission-aligned—such as programs offering financial wellness or support services—it’s typically not considered “unrelated.” Consulting a tax advisor periodically can also help ensure the church remains within IRS guidelines.

The IRS considers any income that doesn’t directly support the church’s mission as Unrelated Business Income (UBI). However, mission-aligned affiliate programs are generally seen as complementary to the church’s purpose, especially if they benefit members’ well-being. To stay compliant, the church can focus on affiliate programs that provide community value and avoid high levels of unrelated income.

Setting boundaries for affiliate income ensures it remains within safe limits. For example, keeping this income as a small percentage of total revenue, avoiding any heavy promotion, and regularly reviewing income ratios will help maintain a safe balance. If the affiliate income ever approaches significant levels, the church can make small adjustments or redirect efforts to mission-centered activities to stay compliant.

While the IRS does not specify an exact limit, it typically expects that the majority of a church’s income is mission-related. If unrelated income is minimal relative to total revenue, the church remains well within safe limits. Regularly tracking revenue sources ensures that unrelated income stays below any threshold that might draw IRS attention. Consulting a tax professional can offer specific guidance if income levels change.

The church can select affiliate programs that align closely with its mission—such as those offering financial support, wellness resources, or educational tools. By presenting these as community resources that support members’ lives, the church demonstrates mission alignment. Clear documentation and transparent communication help show that these programs are an extension of the church’s charitable purpose.