When is Unrelated Business Income Taxable?

If your nonprofit engages in inactivity unrelated to its exempt purpose, you may have Unrelated Business Income that is taxable. Unrelated Business Income is the income from a trade or business regularly conducted by an exempt organization and not substantially related to the performance by the organization of its exempt purpose or function, except that… [Read More]

Why is a 501(h) election important to nonprofits engaged in lobbying?

Many nonprofits are under the impression that lobbying is forbidden or severely restricted, but that is not entirely the case. The fact is that nonprofits need to be very careful about blindly engaging in lobbying activity, but they may freely engage in lobbying as long as that activity amounts to only an “insubstantial” amount of the… [Read More]

Can I use federal grant money to fund lobbying efforts of my nonprofit?

Question. Can I use federal grant money to fund lobbying efforts of my Nonprofit? Answer: No, nonprofits that receive federal funds may not use funds received by the nonprofit as a result of a contract or grant to attempt to influence any federal or state legislation, through direct or grass roots lobbying campaigns.  See OMB Circular… [Read More]

Can my Nonprofit hold Raffle to Raise Money?

Question: Can my Nonprofit hold Raffle to Raise Money? The Charitable Raffle Enabling Act, effective January 1, 1990, permits “qualified organizations” to hold up to two raffles per calendar year, with certain specified restrictions. Answer: A raffle is defined as the award of one or more prizes by chance at a single occasion among a single pool… [Read More]

Can my Nonprofit hold a Poker Tournament or Casino Night Fundraiser?

Question: Can my Nonprofit hold a Poker Tournament or Casino Night Fundraiser? Answer: Unlike raffles and bingo, there is NO exception to the gambling law in Texas for nonprofits to hold poker or casino night fundraising events. The gambling law, Chapter 47 of the Penal Code, applies to nonprofits and to for profits equally. See Tex…. [Read More]