A Private Equity Fund Structure for Nonprofits
As more nonprofits seek growth through alternative investments, navigating the tax implications of private equity structures becomes increasingly important.
In the article “A Private Equity Fund Structure for Nonprofits” published in Tax Notes Federal, Smith Anderson tax attorney PJ Cline examines nonprofits’ use of blocker entities in private equity structures to avoid unrelated business taxable income (UBTI). He proposes a modified strategy involving a new partnership entity formed alongside the blocker, which may allow a nonprofit to avoid UBTI categorization and reduce exposure to the 21% corporate tax on certain investment income.
A PDF of the full article can be viewed here.
Please note that the hyperlink is behind a paywall, and only Tax Notes Federal subscribers may access the content.
“A Private Equity Fund Structure for Nonprofits,” Tax Notes Federal, Volume 187, June 16, 2025, pp. 2087-2091
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