What begins as a revenue generating idea for a nonprofit can sometimes develop into a larger endeavor, possibly requiring consideration of a subsidiary to house the planned activities. Many times, these are activities that mix social and business purposes, and the programs or entities that operate them are often referred to as social enterprises. The […]
unrelated business income tax
The Profitable Side of Nonprofits – Part I: Earned Income
Recently, there has been much discussion about how business can take on a nonprofit flavor through social enterprise and new hybrid legal structures. Here, we would like to take a look at the profitable side of nonprofits in Part I and its relation to different legal structures in Part II. The idea of nonprofits earning […]
Management Service Organizations and Unrelated Business Income Tax
Nonprofit organizations are often seeking better, cost-effective ways to handle administrative services, for example, by using a management service organization (MSO). An MSO can be generally defined as an organization that primarily exists to provide administrative services to multiple organizations. An MSO will generally charge fees for providing such services and this raises the issue […]
UBIT: Scientific Purposes and Scientific Research
In the context of scientific organizations, the IRS states that unrelated business income tax (UBIT) issues generally occur in two situations: (1) a scientific research organization (SRO) engaging in various projects or (2) a tax-exempt non-SRO engaging in research. “Scientific purpose” and “scientific research” are commonly seen phrases in the governing documents for 501(c)(3) tax-exempt […]