This practical tool will help you determine whether your organization has unrelated business income and needs to take action.

Generally, an organization that has received recognition of tax-exempt status under Internal Revenue Code (“IRC”) § 501(c)(3) will not be subject to federal income tax on the organization’s income. However, with some significant exceptions, income generated from an activity unrelated to the 501(c)(3) organization’s exempt purpose(s) may be taxed at regular federal corporate income tax rates as unrelated business income (“UBI”). In addition to being subject to these taxes, 501(c)(3) organizations that engage in too much unrelated business risk losing their tax-exempt status.

A construction project is broken into phases. Considerations for each phase are addressed in separate installments of Napa Legal's new series on nonprofit construction written by Wes Hunnell. Read part three here, which discusses the design phase.

It is important to note that a construction project is broken into phases. Considerations for each phase are addressed in separate installments of this series on nonprofit construction. Part two discusses the design phase.

Faith-based and nonprofit construction is different. Just as commercial, residential, and infrastructure construction projects have different requirements, a construction project in the nonprofit sector has different requirements for a successful project. There are different risk tolerances and different legal considerations. A construction project is often one of the biggest investments a nonprofit will undertake — so preparation is essential for success considering these differences.