Determinants of nonprofits' taxable activities
Although nonprofit is often considered to be synonymous with tax-exempt, many nonprofit organizations earn revenues from unrelated taxable activities, and on average these taxable activities generate $1.5Â million in revenues. Policymakers have expressed concern that the pursuit of unrelated taxable revenues can distract a nonprofit from its primary charitable mission. Our results show that nonprofits earn taxable revenues when the taxable activities produce a relatively higher return, the nonprofit itself is experiencing lower profitability, and donor aversion is lower. These results suggest that nonprofits will pursue specific types of unrelated taxable activities, and then only under certain circumstances, reducing concerns over mission drift caused by widespread nonprofit expansion into taxable markets.
Year of publication: |
2009
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Authors: | Yetman, Michelle H. ; Yetman, Robert J. |
Published in: |
Journal of Accounting and Public Policy. - Elsevier, ISSN 0278-4254. - Vol. 28.2009, 6, p. 495-509
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Publisher: |
Elsevier |
Keywords: | Nonprofits Unrelated taxable activities Unrelated business income Commercialization Mission drift |
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