Nonprofit organizations throughout the country have embraced commercial enterprise as a means of generating revenues and fulfilling their missions. This report is intended to describe the rise of nonprofit commercialism and the subsequent charges made by members of the business community that nonprofit organizations compete unfairly with small businesses. It will illustrate the advantages that nonprofits currently enjoy, such as tax exemptions and various government subsidies. It will also examine the federal government's current public policy intended to curb unfair competition from nonprofit organizations: the unrelated business income tax. Last, the report will offer recommendations for improving the tax to address the concerns of both the nonprofit sector and the small business community.