March 20, 2008 | Read Time: 1 minute
A new study by the Internal Revenue Service shows that much of the money charities earn from business activities comes from selling products, services, and advertising. Charities in 2004 reported that 74 percent of their $5.5-billion in total business income not related to their charitable missions stemmed from their profits on those three types of pursuits.
Nearly 17 percent of the total “unrelated-business income” stemmed from capital-gain net income, partnership and S-corporation income, and debt-financed income, the report said. The IRS said that while these categories of investment income “comprised a relatively small proportion” of charities’ total unrelated-business income, “the total amount of these items rose 73 percent between 2003 and 2004.” The IRS published the data in its newly released Statistics of Income Bulletin for Winter 2008, http://www.irs.gov/pub/irs-soi/04eoub.pdf.
