This is not intended to be tax advice, merely something to be aware of and discuss with your accountant or attorney.  UBIT should be reviewed annually because this area is updated and revised by the IRS on an annual basis.

UBIT is a matter to aware of if your church, including its programs are generating income for the church including its programs which may be considered business by the IRS (facility rental, youth fund-raisers, tours, corporate sponsorships, etc.).  It is worth evaluating to ensure that the church’s tax-exempt status is not jeopardized.  If the church is generating UBIT, then paying the tax is not a terrible thing, unless the income exceeds 15% of the church’s donation income (see comments below).

First, does the income that is potentially UBIT exceed $1,000?  If not, then it doesn’t require IRS form 990T to be filed.  If it is, then the church needs to ask whether the income is UBIT.

The UBIT test must answer “yes” to the following three questions:

1. Is the income from a trade or business? ie. Sale of goods or services.
2. Do you regularly engage in the trade or business? This includes something that might occur once per year, but every year (frequency and continuity).  An annual pizza sale by the youth for camp scholarships might be an example.
3. Are the trade or business activities unrelated to the tax-exempt organization’s purposes as stated in the church’s 501c3 application? The income must contribute importantly to accomplishing the organizations ‘s exempt purposes to be substantially related (from IRS Substantially related document, 3-Apr-2018).

There are a couple exceptions that may apply.

1. If all the labor is provided by volunteers.
2. If all merchandise sold has been donated.
3. Other exceptions include Bingo and business for convenience such as a cafeteria.

Another concern that needs to be checked is the property insurance.  Does your insurance policy cover the UBIT activity you are considering.

Of primary importance, are the funds being raised from the UBIT less than 15% of the total donation income for the church?  Exceeding 15% may imperil the church’s tax-exempt status.

Again, this is not tax advice, merely informative information.  Many nuances and each situation is different so it is important to check with the church’s tax accountant or attorney to ensure the church is in compliance and does not imperil the church’s tax-exempt status.  If you don’t have someone, call the CSF office for some suggestions of resources other churches have used.

In the past, Tristan has been disengaged. Unresponsive to the love shown to him at FEC’s inner-city Mission Church. Living in the inner city, unaware of and unable to experience life outside of the inner city leads to despair and a challenge to envision something different.

CSF manages the Victor Rupp Camp Scholarship fund. The program was set up by the family of Victor and Be Rupp, to honor their parent’s belief in the value of exposing kids to Christ through a Christian camp experience. This program was set up to provide $25 coupons to FEC churches to be given by the churches to needy children in their church to help defray the cost of attending camp. The number of coupons provided is based on the church attendance.

Mission Church wasn’t using their two allocated coupons. When asked, CSF found out that with the poor, a $25 coupon left too much of a financial burden to send their child to camp that costs $350-$400 for the week. Knowing the importance of opening a child’s mind to experiences other than the despair of the inner city, exposure to Christ’s love and the fun that a child experiences at camp, CSF decided to provide two camp scholarships that covered 90-95% of the cost of camp. This would allow the parents to still have some ownership in sending their child to camp.

Tristan’s mother, who was unaware that an experience like camp existed, was highly suspicious and reluctant to send her child to camp. After considerable encouragement by the Mission Church staff she agreed.

After a week at Miracle Camp, Tristan was exuberant. Positively overwhelmed by the experience and camp counselor. The one who was typically disengaged walked up to Mission Church pastor, Michael Brown, looked him in the eye and told him “thank you”.
His subsequent thank-you note says it all (with original spelling).

Dear Church,

Thank you few giving me a coupon to go to church camp I had so much fun I went swimming I went to chapel played soccer played football cougt a frog and went to bed.

Love Tristan

We need your help to impact more FEC kids like Tristan. Some Inner-city and other FEC families can’t afford to give their child the gift of camp. Your donation will positively overwhelm other inner city kids and kids from other FEC churches with an experience at an FEC church camp.

Please generously support the Victor Rupp Camp Scholarship Fund though a donation to CSF. To do so, please call CSF at 260-423-3649 or send an email to info@ChristianServiceFoundation.org. Thank you for your prayer and support to help CSF spread Jesus’ love through summer camp.

*Name has been changed to protect privacy of the child.

Last year, CSF added a new web site to our communication process.  We also started a Facebook page and Twitter feed and we continue to enhance and build on communicating to our current investors and to potential new investors.  If you aren’t following CSF on Facebook, please be sure to “Like” us so you don’t miss any important and helpful information.

We are excited to be offering legacy seminars called Provide & Protect 101.  Statistics indicate that 70% of the people in the US don’t have a will or trust.  You should actually have both.  This seminar teaches you the basics of providing for and protecting your family through your estate.  Watch for upcoming seminars in your area and if you’d like one for your church, please let us know.