Final answer:
Spirit Boosters, Inc., which charges for parking during unrelated sporting events, is most likely to have unrelated business income because the parking fee activity is not substantially related to its tax-exempt purpose. Option third is the correct answer.
Step-by-step explanation:
The question relates to the concept of unrelated business income (UBI) for public charities. UBI is defined as income generated from an activity that is not substantially related to the charitable, educational, or other purpose that constitutes the basis for the organization's tax-exempt status. Non-profit organizations aim to provide goods and services that better lives or improve outcomes in areas such as education or health, and any profits are typically reinvested to provide more services. However, there are cases where these organizations engage in activities that generate income in a manner comparable to for-profit businesses.
Looking at the options provided, Wear It Proud, Inc., which operates a retail store, could potentially have unrelated business income if the activity is not substantially related to its exempt purpose, despite the merchandise being donated. Vets for Pets, Inc., operating vending machines for employees, would usually not be considered UBI as it can be for the convenience of the employees and directly connected to the organization's exempt function. Spirit Boosters, Inc., which charges for parking during unrelated sporting events, is likely to be generating UBI, as parking fees during non-charitable events are generally not related to the group's tax-exempt purpose. Lastly, Operation Wilderness, Inc., which operates a summer day camp with volunteers, is providing services related to its mission and probably not generating UBI.
Given the information, the public charity that has unrelated business income among the options is Spirit Boosters, Inc. that charges for parking during unrelated sporting events.