As more and more churches and other faith-based organizations engage in social enterprise and earned revenue generating activities questions emerge around taxation. What taxes do churches have to pay on revenue generating activity and to whom? Is their tax-exempt status put in jeopardy by engaging in social enterprise? How do churches and faith-based organizations make sense of federal, state, and local tax regulations? 

‍

Andrew McGannon looked into some of these questions as part of a research project for his masters in public policy at Duke University on behalf of RootedGood in the spring of 2022. Through research on tax policy, and case studies of a diverse set of faith-based organizations doing social enterprise, Andrew explores key aspects of the questions that faith-based organizations need to keep in mind, and provides public policy recommendations that will encourage faith-based organizations to engage in meaningful, and tax compliant, social enterprise. He finds that faith-based organizations can engage in social enterprise without losing their tax exempt status, but they need to do so carefully and they may need to pay some taxes as part of the enterprise. His full thesis is available to read here. 

‍

For more assistance with questions around taxation, check out our free training video on churches and taxation or reference our decision tree tool, What About Taxes?

‍