What is UBI, and why might a nonprofit need to know about UBI? UBI is income from a regularly-carried-on trade or business that is not substantially related to the organization’s exempt purpose. To generate UBI, the activity must be:

1. A trade or business,
2. Regularly carried on, and
3. Not substantially related to the organization’s exempt purpose.

These three requirements form the three facets of the UBI test. To be considered a source of unrelated business taxable income, an activity must conform to each of the three facets. Trade or business… Here is an IRS course to learn more about UBI: https://www.stayexempt.irs.gov/home/existing-organizations/unrelated-business-income