Can a non profit organization lose its status if it hosts a used book sale?

Posted by on Feb 20, 2011 in Government & Non-Profit | 2 comments

luvs2dkr8 asked:

I work for a non for profit organization. We are planning to host a used books sale in our facilities. Can we lose our non for profit status if we invite a “for profit” book distributor to participate in our used books sale? The “for profit” book distributor will be selling used books only. An answer to this question with verifiable references will be very much appreciated.

Thanks!

non profit

2 Comments

  1. 22-02-2011
    Worldly25 says:

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    No you will not. Many organizations do a fundraiser, such as a craft fair using paid vendors.

  2. 26-02-2011
    Alan K says:

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    The key here is whether such an activity is substantial in relation to the overall activities of the organization’s exempt activities. If this is an annual event (or not regularly carried on) then usually it will have no effect on the tax-exempt status.

    Also, if such a fundraising activity uses volunteer labor or donated goods, then such an activity will not jeopardize your tax-exempt status nor will it be treated as income from an unrelated business activity.