Fear of Taxes

This article from the Chronicle of Philanthropy talks about the small amount of taxes paid by non-profits for their unrelated (taxable) revenue operations. Short version: there are lots of ways to make profits unprofitable in the tax code.

It reminds me of a presentation I went to a few years ago about earned revenue opportunities for nonprofits, where a predictable debate over museum shops broke out--what merchandise was related to the organization's mission & what wasn't, etc. The IRS used to use museum shops as an example in their publications on the subject. When faced with a brace of questions about whether one kind of shop could sell a certain kind of product vs. another kind of shop & another kind of product, the presenter just threw up her hands and said, "Hey, worst case scenario, you pay tax. It's not a big deal. Businesses do it all the time." It reminded me that we often needlessly twist ourselves into all different kinds of shapes trying to avoid lines of business that might be subject to tax, when we can just build it into the model...