Charities enjoy tax-free profits from "unrelated business income"

An investigation by Grant Williams and Peter Panepento of The Chronicle of Philanthropy found that about half of the nation’s largest charities pay no taxes, even though they generate millions in unrelated business income. Some organizations are claiming a loss on their income — meaning that they are losing money on side ventures. A change in federal tax law now makes it possible for the public to see the IRS Form 990-T, filed by charities that generate money from activities that do not relate to their charitable mission. Williams and Panapento spent the past several months requesting and gathering these documents.