What is an easy way to share the By Laws of the affiliate club with our members? Most organizations place their By Laws/ Constitution on their website. Save your governing documents as a PDF and post them on your website under your “About us” page.

What is private inurement?
Private inurement is prohibited in all nonprofits. It happens when an insider — an individual who has significant influence over the organization — enters into an arrangement with the nonprofit and receives benefits greater than she or he provides in return.

The most common example is excessive compensation, which the IRS condemns through intermediate sanctions (significant excise taxes). Insiders — referred to in IRS parlance as “disqualified persons” — can be high-level managers, board members, founders, major donors, highest paid employees, family members of any of the above, and a business where the listed persons own more than 35 percent of an interest.

Private inurement is an absolute term. There is no de minimis restriction. If a nonprofit is organized to benefit an individual, even while fulfilling its tax-exempt purpose, it cannot be a tax-exempt organization. Under the state law, an organization may lose its nonprofit status.

For examples of private inurement: go to https://www.gvng.org/resource/private-benefit-private-inurement and https://boardsource.org/resources/private-benefit-private-inurement-self-dealing/

What is Unrelated Business Income Tax (UBIT)?
A major benefit to being a nonprofit is the exemption from federal and state income taxes. However, certain activities, considered unrelated to the organization’s core mission, are subject to taxes. This tax is called Unrelated Business Income Tax (UBIT). To be subject to UBIT, a profit-making activity must be regularly carried on, constitute a generally recognized trade or business, and be an activity that is not substantially related to the organization’s tax-exempt status — meaning the activity does not further the mission of the organization.
Normally, royalties are not taxed. Income from selling membership lists to a for-profit organization and from affinity programs are subject to UBIT. Even though unrelated, profit-making activities are permissible, but they should not consume a significant portion of the nonprofit’s resources. In extreme cases, the IRS may determine that the organization has abandoned its tax-exempt purposes and may seek to revoke its exempt status. https://boardsource.org/resources/financial-fundraising-issues-faqs/

Can a nonprofit organization have too much profit?
Being financially successful is the dream of just about every nonprofit. An operational surplus allows you to do even more with less stress and equips your organization to undertake new activities to accomplish your mission. But you need to understand what is generating your surplus. If your organization engages in activities outside of its mission, you may be generating unrelated business income. Excessive unrelated business income may create UBIT (unrelated business income tax) or endanger the tax-exempt status of your organization. A second important issue related to revenue is what you do with it. All surplus has to be invested back in the organization; it cannot go in the pockets of staff or board members. This rule applies whether your nonprofit has revenues of $4,000 or $40,000,000. If your organization creates unexpected surplus, which cannot be used in operating expenses, you may wish to create an endowment, increase your rainy day reserves, or provide services at a lower cost to clients. https://boardsource.org/resources/financial-fundraising-issues-faqs/