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On Demand Audio Audio Only

Earned Income Issues and Guidance for California Nonprofits (Audio Only)

(205 reviews)

Produced on January 13, 2017

Taught by
$ 59 Tax, Business, Corporate, & Securities, Non-Profit, and Public Interest In Stock

Course Information

Time 61 minutes
Difficulty Intermediate

Course Description

Many people are surprised to learn that over 70% of the revenues from reporting public charities comes from the sale of goods and services. And charities are increasingly engaging in earned income (and social enterprise) ventures as they face the simultaneous challenges of uncertainty in public fundraising and the tax benefits associated with charitable giving, undependable philanthropic funding, and increased competition for limited resources. But earned income is an area wrought with misconceptions and misunderstandings.

The rules governing unrelated business taxable income (UBTI) are complex. As a result, many non-profits simply fail to properly report and pay taxes on their UBTI or preclude themselves from starting an earned income venture. As the differences in the activities of nonprofit and for-profit organizations continue to blur with the increasing commercialization of charities and the growth of socially-purposed taxable entities (like the benefit corporation), the associated tax issues will only get more complicated. Subsidiaries, joint ventures, and commercial co-ventures may be useful options for some nonprofits if entered into with sufficient knowledge and consideration.

This audio-only course, taught by Gene Takagi, the managing attorney of NEO Law Group, a firm specializing in nonprofit law, reviews the legal issues that should be considered when reviewing a non-profit's earned income venture and offers practical guidance on best practices for both in-house and outside counsel.

Learning Objectives:

  1. Understand how to assess an existing or planned profit-making venture for corporate and tax law compliance
  2. Distinguish between related and unrelated businesses
  3. Learn when unrelated business income tax (UBIT) gets triggered and what deductions are appropriate to take to minimize the organization's tax burden
  4. Assess when a subsidiary or affiliated entity may be of use and what legal forms (including hybrid forms) such an entity may take


Gene Takagi

NEO Law Group

Gene Takagi is a Principal at NEO Law Group, Contributing Publisher of the Nonprofit Law Blog, and a Lecturer at Columbia University. At NEO, Gene has represented over 700 nonprofit organizations on corporate, tax, and charitable trust law matters. Gene is a popular writer on nonprofit legal topics and has been published by The New York Times, The Nonprofit Quarterly, The Chronicle of Philanthropy, The Nonprofit Times, Taxation of Exempts, EO Tax Journal, and ALI-ABA. He is also a popular speaker who has presented at conferences for Independent Sector, BoardSource, the National Association of Attorneys General / National Association of State Charity Officials, CalNonprofits, Net Impact, the American Bar Association, the Western Conference on Tax Exempt Organizations (WCTEO), Georgetown Nonprofit Governance, the Northern California Planned Giving Council, Social Media for Nonprofits, the National Network of Fiscal Sponsors, and numerous local and regional bar and CPA associations.  In addition, Gene has been a regular contributor to Tony Martignetti Nonprofit Radio since 2010.

Gene's professional experiences are diverse: corporate attorney for Sheppard Mullin Richter & Hampton LLP, professor of nonprofit law at the University of San Francisco, assistant professor at Saint Mary's University of Minnesota, director of the medical and behavior divisions of the San Francisco SPCA, management consultant for Allders International (specialty retail), and managing director of Suki's International (beauty/education). This background helps him provide clear, understandable legal advice with an appreciation of the relevant business issues. Gene, a graduate of UCLA School of Law and of USF's Master of Nonprofit Administration program, is a recipient of multiple awards for his work, including Outstanding Nonprofit Lawyer (American Bar Association, Nonprofit Organizations Committee, 2016), Outstanding Barrister of the Year (Bar Association of San Francisco) and Northern California Super Lawyer (2015, 2016, 2017, 2018, 2019). He currently serves on the boards of CompassPoint and The Nonprofit Quarterly and the planning committee of the WCTEO and was elected to serve on the board of BoardSource starting March 2020. Gene previously served on the boards of Community Initiatives, Net Impact, JCYC, the Barristers Club of the Bar Association of San Francisco, and the Public Policy Committee and John W. Gardner Leadership Award Committee of Independent Sector.


Gerald C.


Dave D.

well planned out

Erin H.

Presenter was good - easy to listen to.

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