Can an HOA try to make money from outside the community?

The short answer is yes.

They should check your States Corporate law and Tax law (perhaps even consult with a CPA or tax attorney) to see what the limit is on the outside income that they can make before they are in jeopardy of losing their non-profit status.

Tim

I am not an accountant or lawyer, but it isn't so much a matter of making a profit that makes or breaks a non profit, it's what you DO with that profit.

Many many non-profits take an item (a candy bar, a bottle of soda, or a 6 inch water line through a meter) and sell the item for more than their cost. But, the difference between a non profit and a business is that the non profit turns that extra money back into the corporation, and the business (eventually) turns the extra money back to investors (more or less, this isn't a perfect analogy). Your HOA can invest the money in a CD, interest bearing account, or even buy and sell gold bullion on the futures market (if allowed by your regs), but when the bottom line comes, they have to show where the money went, and it has to be reinvested in the HOA somehow.

As a non-profit, a corporation can even pay salaries (American Red Cross, Boy Scouts of America, etc.), they just can't pay dividends or issue stock, i believe.

and, as mentioned, the IRS has some rules about where you are probably crossing the line between a non profit business and a real profit business.