Can a 501(c)(7) nonprofit private social club sell services or products to the general public at a profit used by the Club to contain members’ dues?
Yes. But don’t brag about it.
A social club may make money from selling its services or products to the general public but only within strict limits. In general, a social club may be exempt if it is supported solely by membership fees, dues and assessments. It cannot generally make its facilities available to the general public or carry on any other type of business activity, although non-members may use the club as guests of members. A social club may receive up to 35% of its gross income, including investment income, from sources outside of its membership, but not more than 15% of the gross receipts may be derived from the use of the club’s facilities or services by the general public or from other activities not furthering social or recreational purposes of its members. If the club exceeds these limits, the IRS could revoke the exempt status.