Besides conducting related business activity and earning income through passive strategies, nonprofits can simply earn income through unrelated business activity. Unrelated business activity is exactly what it sounds like: activity a nonprofit conducts that has nothing to do with its charitable purposes. More accurately unrelated business income is income generated from activity that is: A trade or business (the IRS defines any activity designed to raise income from the sale of goods or performance of services as a trade or business); Regularly carried on (isolated sales or even sporadic activity may not be considered “regularly carried on”); and Not......
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May 15, 2020
Earned Income Strategies (Part 3 of 5): Passive Income Activity (Let Money Work for the Cause)
The next option for earning income that every nonprofit should know about is income exempt from unrelated business income tax. While there are quite a few exceptions, the key exception...
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May 8, 2020
Earned Income Strategies (Part 2 of 5): Related Business Activity (Doing Good by Doing Business)
Contrary to popular belief, a nonprofit can (and maybe even should) make a profit from its business activities. Depending on what the activity is, a nonprofit 501(c)(3) organization may not...
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May 1, 2020
Earned Income Strategies (Part 1 of 5): How For-Profit Strategies Can Help Nonprofit Corporations
It’s no secret that charitable resources are limited and hard to come by for small nonprofit organizations. Many foundations and grant making entities, in fact, advise nonprofits to develop long...
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April 17, 2020
Approaching IRS’s Deadline for Paper 1023 Applications
As of January 31, 2020, the Internal Revenue Service (the “IRS”) revised the 1023 application for 501(c)3 tax-exempt status submission process to be online instead of by paper. The IRS...
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April 3, 2020
Force Majeure Clauses During CoVid-19
Recently many businesses have been concerned with how to deal with CoVID-19. Concerns range from how to navigate complying with mandatory quarantines and other state and federal regulations, as well...
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March 23, 2020
CCPA Considerations when Buying or Selling a Business
When local businesses are bought and sold, sellers and buyers often do not consider data compliance to be a major concern. At most the business has a small website and...
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March 18, 2020
Washington Privacy Act – Not Quite Yet
Over the past several weeks, there has been debate about whether Washington state lawmakers would pass legislation known as the Washington Privacy Act (“WPA”). The WPA mimicked concepts of the...
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March 11, 2020
Coronavirus and the Law: Is there a Legal Duty to Prevent Harm during a Pandemic?
It’s no doubt that the novel coronavirus (COVID-19) has introduced a high level of panic for local businesses, especially with many big companies facing large-scale work force consequences due to...
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March 4, 2020
Newman’s Own Law
Fun Fact: Did you know that one of the largest food product distributors in the world is also owned by a 501(c)(3) tax exempt organization? The Newman’s Own Foundation (a...