For-Profit or Nonprofit or Hybrid Business?

Traditionally, the divide between a for-profit or nonprofit organization was clear: for-profit businesses would engage in revenue generation and nonprofits would engage in charitable work to solve social issues and would largely stay away from revenue generation. The rise of social enterprises in recent years, however, has made that distinction less and less clear. Social entrepreneurs are finding innovative ways to challenge the […]

Practical Strategies for Building a Bigger Tent

Our nation feels more divided than ever. From political gridlock in Washington, D.C. to a fragmented media landscape, more Americans are forming opinions and consuming information from niche sources and polarizing points of view. The social change sphere is not immune from this splintered and siloed way of thinking. Nonprofits and philanthropies also have limited bandwidth at both the organizational […]

Tax Exempt Organizations with For-Profit Subsidiaries

Federal tax law permits a tax-exempt organization to have one or more for-profit subsidiaries. The tax-exempt parent organization may own some or all of the equity of the for-profit subsidiary. As discussed below, the extent of stock ownership affects the taxability of income from a for-profit subsidiary received by a tax-exempt parent.

The tax-exempt organization must determine the organizational form of […]