commerciality doctrine

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If your not-for-profit has lost financial support during the pandemic, you may be looking for ways to raise new revenue. But if your proposed solution is a side business, be careful. Even when business ventures are related to a not-for-profit’s exempt purpose, they can run afoul of the commerciality doctrine — and jeopardize an organization’s tax status.

woman holding hundred dollar bills fanned out; image used for blog post about commerciality doctrine for not-for-profits

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Continue Reading Not-for-Profits: Be Careful of the Commerciality Doctrine

The commerciality doctrine was created along with the operational test to address concerns over not-for-profits competing at an unfair tax advantage with for-profit businesses. But even business activities related to your exempt purpose could fall prey to the commerciality doctrine, resulting in the potential loss of your organization’s exempt status.

Several Factors Considered
The operational…