A nonprofit group may raise a lot of money from fund raising. These fundraisers could be so successful the leaders may wonder if the homeschool group owes anything to the government in taxes. For the most part, fund raising is not considered part of your nonprofit group’s mission; it is just a means to the end. After all, your group’s mission is to encourage homeschooling, not to sell ads, pizza or other products.

The Internal Revenue Service calls the money a homeschool group or any nonprofit raises from a fundraiser “Unrelated Business Income,” meaning it is money collected in a trade or business that is not related to your primary mission (or what the IRS calls your “exempt purpose”).

Your homeschool organization could have unrelated business income if you sell:

Fortunately, the IRS has several exceptions to paying the UBIT tax:

One of these exceptions may apply to most homeschool organizations.

Listen as Carol explains the 4 exceptions to UBIT:

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