After identifying whether an organization is a “Donor-Supported” entity (Section 170(b)(1)(A)(vi)) or a “Related Revenue” entity (Section 509(a)(2)), which determines which public support rules apply to an organization, the next critical question is how public support is measured. Many nonprofit leaders are surprised to learn that public support is not evaluated on a year-by-year basis, …
In the prior post in this series, we explored why public support matters and how failure to satisfy the IRS public support rules can result in unintended reclassification as a private foundation. Before an organization can assess whether it is meeting the applicable public support test, however, it must first understand which public support rules …
Not all public charities are alike, and not all rely on the same sources of funding. While many nonprofit leaders understand the basic requirements for qualification under Section 501(c)(3) of the Internal Revenue Code (“IRC”), fewer appreciate the ongoing obligation to maintain public charity status through compliance with the IRS public support rules. For boards, …
