I think the organization is exploiting a loophole with this arrangement. Under the Internal Revenue Code, a tax exempt organization must recognize, and is taxed on its unrelated trade or business income. Unrelated business income is the income from a trade or business regularly carried on by an exempt organization and not substantially related to the performance by the organization of its exempt purpose or function, except that the organization uses the profits derived from this activity. There is an example provided by the IRS on its website (http://www.irs.gov/publications/p598/ch03.html):
Travel tour programs. Travel tour activities that are a trade or business are an unrelated trade or business if the activities are not substantially related to the purpose for which tax exemption was granted to the organization.
A tax-exempt university alumni association provides a travel tour program for its members and their families. The organization works with various travel agencies and schedules approximately ten tours a year to various places around the world. It mails out promotional material and accepts reservations for fees paid by the travel agencies on a per-person basis.
The organization provides an employee for each tour as a tour leader. There is no formal educational program conducted with these tours, and they do not differ from regular commercially operated tours.
By providing travel tours to its members, the organization is engaging in a regularly carried on trade or business. Even if the tours it offers support the university, financially and otherwise, and encourage alumni to do the same, they do not contribute importantly to the organization's exempt purpose of promoting education. Therefore, the sale of the travel tours is an unrelated trade or business.
Since the organization is arranging these tours in conjunction with an International Convention, it can be argued that any income generated is related to its exempt purpose of religious education. However, I wonder if an argument could be made that it doesn't support religious education since, as I understand it but I could be wrong, the same convention program is given at the local conventions so by providing the travel arrangements to the International Conventions the organization is not furthering religious education because the same education program is provided locally.
The reason that I bring this up is because under the tax laws, an exempt organization must provide copies of their tax returns to anyone who requests it. http://www.irs.gov/charities/article/0,,id=139231,00.html. After the enactment of The Pension Protection Act of 2006, this includes the Unrelated Business Income return. Just imagine if the organization reflects this on their Unrelated Business Income return, I am sure the rank and file would not be happy to learn how much the organization is making off these International Convention. If it is not reflected on the return, I wonder if a good argument could be made so that the IRS would conduct an audit of this arrangement. They are always looking for high profile situations to audit.