Tag Archives: taxes

[A Performance] Space: The Final Frontier – Don’t Own It and Find Someone to Donate Some

Don’t own your own performance space.  It’s a liability, not an asset.  Balance sheet be damned.

An asset is something you can sell.  No one wants to buy a theatre…unless it’s to tear it down.  And if it’s an Historic Building, run like the wind.

This isn’t just avoiding an “Edifice Complex.”  Unless, of course, you adore unending capital campaigns to rebuild the defects your company “cheaped out” on.  Find funding for what you do, not where you do it.

That said, one of the most overlooked ways in which a board member can help an organization is to provide eternal, free nearby office space for the company (there’s never enough inside the theatre).  It’s a major tax deduction and the perfect in-kind gift – one that actually removes a necessary expense from the budget.

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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