In 2018, charitable giving in the U.S. totaled over $427 billion. Yet, charitable contributions are not the only source of revenue for nonprofit organizations. Commercial activities are an ever-growing source of revue in the sector – and one that is causing its own set of issues. Nonprofits face unrelated business income tax (“U.B.I.T.”) on business income derived from commercial activities not related to tax-exempt status, and in more extreme cases, they may even face the loss of tax-exempt status if not operated exclusively for tax-exempt purposes. Nina Krauthamer and Hannah Daniels, an extern at Ruchelman P.L.L.C. and student at New York Law School, explain.