From my limited and non-expert knowledge, it's completely acceptable for a non-profit to generate an income. This money can be used to pay for overhead (office space, education, web hosting account, domain name, and even salaries).
I think many non-profits are strapped for cash because they rely on either government grants, fundraising, or donations... but thinking outside the box here, a self-funding and self-sustaining non-profit is the best kind, in my opinion.
Actually, I plan on starting a non-profit in the future, and unless I am told otherwise, I will self-fund it... in fact, personally, I wouldn't have it any other way! Working in the academic research environment right now, I am tired of relying on funding sources... frankly, I feel that it creates more politics and more drama!
In the free enterprise system, I don't feel I have to rely on the government or donations... there is a lot of room for entrepreneurs to help out with social causes in the non-profit sector. Just to clarify, though, I do not think there is anything wrong with relying on the government or donations... but if I can help it, and since I know how, I would rather make the money on my own.
I may have digressed a little, but can you tell I have strong opinions about the topic?
Anyway, I hope this helped a little
Quick question, though, are you recognized by the IRS as a non-profit?