Joint Ventures and Partnerships

If your nonprofit is engaging in a joint venture or a partnership arrangement with another entity, it is up to the board to ensure that the nonprofit is not engaging in a transaction resulting in private benefit to the other partner. A policy is helpful to ensure there has been a review of the partnership or joint venture arrangement that might uncover, for example, one of the parties in the joint venture is a family member of a board member (conflict of interests) or that the payments being made to the non-charity partner are in excess of market value (excess benefit transaction).

• Review a Sample Joint Venture policy courtesy of the Nonprofit Risk Management Center and Venable, LLP.
• To read more about private benefit, see the resources provided by the IRS.
• Read the instructions to the IRS Form 990 (page 20), which includes examples of how engaging in a joint venture could jeopardize a nonprofit’s tax-exempt status, such as maximization of the profits from the joint venture taking priority over the charitable mission of the nonprofit.