Behavior of Nonprofit Organizations in For-Profit Markets: The Curious Case of Unprofitable Revenue-Raising Activities
When nonprofit organizations in the U.S. engage in activities that are "substantially related" to their legal mission they pay no profits taxation, but profit from "unrelated business" (UB) activities is taxed. Since UB activity has no apparent justification other than to generate revenue, we attempt to explain why no profit is so frequently reported. We examine the accounting allocation of joint costs, such as depreciation, between the taxed and untaxed activities in six industries - including health, education, and the arts - and also the specific kinds of UB activities undertaken. We find evidence that the reported unprofitability of UB activity masks true profitability.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 164 (2008)
Issue (Month): 4 (December)
|Contact details of provider:|| Web page: https://www.mohr.de/jite|
|Order Information:|| Postal: Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Khanna, Jyoti & Sandler, Todd, 2000. "Partners in giving:: The crowding-in effects of UK government grants," European Economic Review, Elsevier, vol. 44(8), pages 1543-1556, August.
- Joseph J. Cordes & Burton A. Weisbrod, "undated". "Differential Taxation of Nonprofits and the Commercialization of Nonprofit Revenues," IPR working papers 97-15, Institute for Policy Resarch at Northwestern University.
- James R. Hines Jr., 1999.
"Non-Profit Business Activity and the Unrelated Business Income Tax,"
in: Tax Policy and the Economy, Volume 13, pages 57-84
National Bureau of Economic Research, Inc.
- James R. Hines, Jr., 2000. "Nonprofit Business Activity and the Unrelated Business Income Tax," NBER Working Papers 6820, National Bureau of Economic Research, Inc.
- Okten, Cagla & Weisbrod, Burton A., 2000. "Determinants of donations in private nonprofit markets," Journal of Public Economics, Elsevier, vol. 75(2), pages 255-272, February.
When requesting a correction, please mention this item's handle: RePEc:mhr:jinste:urn:sici:0932-4569(200812)164:4_727:bonoif_2.0.tx_2-. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Wolpert)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.