Profit does not equal surplus income.
A not-for-profit is a non-profit in the sense that it does not distribute "profits" to shareholders. When a non-profit has revenues in excess of expenses, it is surplus income and NOT "profits."
A church may receive offerings, rent a meeting place, allow other churches to rent its building, and pay its vendors and staff without fear of undue interference. The IRS is only concerned that you follow its rules on unrelated business income, and are abiding by its regulations governing non-profits (e.g., not engaging in partisan political activities beyond the threshold established by IRS regs).
For someone to receive a tax deduction for charitable contributions (only important for those itemizing), the church must provide them with an official statement for all checks of $250 or more (the IRS will not consider a canceled check a valid receipt). Also, the church should put on the bottom of said statement some wording to the effect that "no goods or services were exchanged" for the contributions. In other words, if people give your church money for lights, rent, staff sallaries, and missions, it is deductible. If they pay for their kid to go to a church camp, it is not deductible. In the case of organizations that provide some real "gift" in exchange for contributions, the entity must segregate the tax deductible from the non-tax deductible portions (e.g., Ligonier deducts the cost of the monthly CDs from the total "donation" in their annual statement; organizations will often specify the value of the meal at a banquet as opposed to the tax deductible gift).
For details, you should direct your question to our resident PB tax attorney for details.
BTW, a tax attorney would know better than I, but it is NEVER a good idea to print a "designation" to a specific individual on the memo line of a check. Overly aggressive auditors can challenge/disallow it. Most missions agencies encourage you to write the check to the organization and indicate your particular support of a specific missionary on the response form (or as a post it put on the check).
