Public Charity: Public Support Tests Part II: 509(a)(2)

A 501(c)(3) organization is presumed to be a private foundation unless it qualifies as a public charity. Part I of this post discussed how an organization can qualify as a public charity under one of two 509(a)(1) tests, either the one-third support test or the facts and circumstances test. Alternatively, an organization can qualify as […]

Public Charity: Public Support Tests Part I: 509(a)(1)

A 501(c)(3) organization is presumed to be a private foundation unless it qualifies as a public charity. As discussed in a previous post and on our short YouTube clip, public charity classification is generally far more advantageous due to the burdensome rules and restrictions applicable to private foundations. Most 501(c)(3) organizations qualify as public charities under Section […]

Public Support Tests- Unusual Grants

An organization exempt under IRC 501(c)(3) may qualify as a public charity if (1) it normally receives one-third of its TOTAL SUPPORT from sources that qualify as PUBLIC SUPPORT (One-Third Support Test); or (2) it meets the Facts and Circumstances Test, including the Ten-Percent-of-Support Requirement. PUBLIC SUPPORT includes: Direct or indirect contributions from the general […]

Public Support Tests – Public Charities

You'll find a discussion of the general advantages of classification as a public charity rather than a private foundation in a January 1, 2005 post.  This post will discuss how charitable organizations receive recognition as a public charity under IRC Section 509(a)(1). Background: All 501(c)(3) organizations are categorized as private foundations unless they fall into […]

501(c)(3) Operational Test

To be or stay exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be operated exclusively for one or more of the exempt purposes described in section 501(c)(3) (“exempt purposes”). The first part of a compliance analysis with respect to this requirement referred to as the Operational Test is to examine whether […]

Independent Sector National Conference 2014: Imagine – Public Policy Action Institute

Imagine. That’s the theme of the 2014 Independent Sector National Conference currently being held in Seattle. And it’s a reminder for nonprofit board members and managers of the importance of thinking beyond our very important day-to-day matters and mere compliance. One of the Conference’s two important pre-conferences was the Public Policy Action Institute (PPAI):  The Institute is […]

Independent Sector Public Policy Action Institute 2013: Key Issues in Tax Reform

  Day Two of the Independent Sector Public Policy Action Institute kicked off with a session on tax reform moderated by Kyle Caldwell, Charles Stewart Mott Foundation, and divided into five hot topics. Charitable Deduction. Richard Schmalbeck, Duke University School of Law, discussed the availability of a charitable contribution deduction only to itemized filers and the […]

Foundations Supporting Advocacy

Private foundations are subject to strong prohibitions on “direct” and “grassroots” lobbying, generally meaning any direct contact with a member of a legislative body regarding specific legislation and encouragement by the foundation to have individuals contact legislators to convey a position on specific legislation, respectively. However, as the Donor Forums of Chicago discusses in “How […]

Introduction to Lobbying by Public Charities

General Rule:  No substantial part of the activities of an organization described by IRC Section 501(c)(3) may be the carrying on of propaganda or otherwise attempting to influence legislation. This general rule has unnecessarily deterred many public charities from engaging in activities to influence legislation, more commonly referred to as lobbying.  A charity’s board of […]