Page 101 - 2024 Orientation Manual

IRS 501(c)(3) - A charitable or educational tax-exempt organization that is prohibited from
actively engaging in lobbying. The Louisiana Bar Foundation and the Louisiana Client Assistance
Foundation are examples.

IRS Form 990 - The annual information report nonprofits are required to submit to the IRS. This
document is a public record.

IRS Form 990T - The annual tax return on unrelated business income (UBIT) that nonprofits are
required to file with the IRS. This document is a public record.

IRS Letter of Determination - An official notice from the IRS stating that the organization is a
nonprofit and exempt from the payment of federal income taxes.

Nonprofit - Accepted substitute term for not-for-profit, which is a legal reference indicating tax
status granted by the IRS.

Public Records - IRS records which are deemed to be public, including the annual federal tax
filings (990 and 990T), application for tax-exempt status, and IRS letter of determination.

Sponsorship - Payment(s) made by corporations or individuals to a nonprofit where there is no
expectation that they will receive any "substantial return benefit." A substantial return is identified
as any benefit other than (1) the use or acknowledgment of the sponsor's name, logo or product
lines in connection with the activities of the exemption organization, or (2) any other benefits that
do not exceed the value of 2% of the total sponsorship payment. Sponsorship payments are exempt
from UBIT.

Unrelated Business Income Tax (UBIT) - Income considered by the IRS to be taxable because
they are identified as unrelated to the nonprofit organization's mission and goals. The IRS may
consider activities unrelated if they are regularly carried on and not substantially related to the
furtherance of the exempt purpose of the organization.