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Subject:
From:
Tod Engine <[log in to unmask]>
Reply To:
Museum discussion list <[log in to unmask]>
Date:
Tue, 6 May 1997 14:09:28 GMT
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<<When determining how much earned income a non-profit institution can
generate, it should first be divided into mission-related and unrelated
income.  That is, how much income is generated by activities related to
the mission of the organization (e.g educational programs, admissions,
published works)?  How much income is generated by unrelated activities
(e.g parking, restaurants, travel programs)?
For tax purposes, an organization never wants to have more than 1/3 of its
income being generated by unrelated activities.
For example, the Girl Scouts can not have more than 1/3 of their total
income generated by cookie sales, or else they would be at risk of losing
their 501(c)(3) status.
The Foundation Ceneter has many resources available on this subject.>>

Is the non profit truly in jeopardy of losing their non profit status, or
would it just have to pay income taxes on the unrelated income?  Ladies &
Gentlemen, I believe this is the main reason why many museums are in such
bad financial condition.  The prohibition on generating earned income not
related to an organization's goals makes it very difficult to become self
sufficient. We must always be at the mercy of foundations and the
governement, when in this free market economy it should be possible for
these musums to thrive if they were not held back by "big brother" i.e.
big government.

For an industry that is designed to be preserving things forever, we sure
have a funding system that is wildly unstable and unpredictable, to say
the least.

Rick

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