U-Better, U-Better, UBIT

Watching arts nonprofits seek funding in unusual ways leads to same old/new discussions on Unrelated Business Income Tax.

Taking a group of donors for a London theatre tour (even if all the finances are handled by an independent agent)…UBIT, you betcha.

The percentage of time spent in London at a lecture about your company’s particular brand of theatre…OK.

Selling t-shirts with just the logo of your natural history museum…UBIT, you betcha.

Selling t-shirts with dinosaurs on them at your natural history museum…OK.

Leasing part of your building to a separate business…UBIT, you betcha.

Items sold at a gift shop with a separate public entrance…UBIT off more than you can chew.

Items sold at a gift shop only accessible to ticket-buyers…UBIT only items not related to the tax-exempt purpose of the organization.

UBIT. Not just another 4-letter acronym.

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