The Texas Tax Lawyer
This article summarizes special tax considerations that should be taken into account when for-profit parties seek to engage in joint ventures with charitable organizations. In particular, there are two areas of concern unique to charitable organizations with respect to joint ventures with for-profit parties. First, certain rules restrict or prohibit a charitable organization's ability to enter into transactions with insiders. Second, a charitable organizations' participation in a joint venture with a taxable party may cause the charitable organization to incur unrelated business taxable income or lose its tax-exempt status. Underlying both of these areas of concern is the overriding concern that a charitable organization be organized primarily for the conduct of its charitable purposes and not engage in any activity that results in private inurement or private benefit.
State Bar of Texas
Terri L. Helge,
Joint Ventures of Nonprofits and For-Profits,
Tex. Tax Law.
Available at: https://scholarship.law.tamu.edu/facscholar/722