Generally, exempt organizations are taxed on income from any unrelated trade or business activities regularly carried on by the organization, less any permitted deductions. Promotion of private companies is generally considered advertising – an unrelated business activity. If the recognition given to corporate sponsors is deemed to be advertising, then the sponsorship payment may be taxed as unrelated business income and will not be counted as public support for purposes of qualifying as a public charity.
How to Start a Non-Profit Organization
We put together a guide to five things all non-profit founders should do before filling out any paperwork to help you get started on the path to success.