i designed a t-shirt for a non-profit organization. I used an Adobe illustration. I believe I will need to purchase an extended contract because it is salable merchandise. They are printing less than 100 t-shirts. I designed the t-shirt for free. Can I purchase the image and have the contract work for the non-profit or will the organization need to purchase it? Also, are there any discounts for non-profit organizations?
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First: There is no difference in the licensing terms for non-profit or for profit work and there is no discount available for non-profit organisations.
As the asset is to be printed on a t-shirt for distribution, you will need an extended license as you correctly assumed, "unless (A) the Work has been modified to the extent that the modification is not substantially similar to the original Work and can qualify as an original work of authorship;"
You can buy the asset on behalf of the organisation or the organisation can buy the asset, whatever is easiest.