The Internal Revenue Service (IRS) recently issued long awaited guidance on so-called “ancillary” joint ventures between tax exempt organizations and for-profits. An “ancillary” joint venture is a partnership between an exempt organization and a for-profit where the activity being conducted by the partnership is not a substantial part of the exempt organization’s total activities. The new guidance, Revenue Ruling 2004-51, clarifies that a 501(c)(3) organization can participate in an ancillary joint venture with a forprofit without jeopardizing its exempt status or triggering unrelated business income tax on its share of the income from the venture where participation furthers the organization’s tax-exempt purposes and where the organization shares governance and ownership of the venture on a 50-50 basis with its forprofit partner and retains control over those aspects of the venture that relate to its exempt purposes.