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Related Clients

San Francisco Foundation

Women's Funding Network

Trinity Children and Family Services

Rainbow Housing Assistance Corporation

Trust For Public Land

Related Resources

Related publications, FAQs, documents, and useful links for this practice area. View Resources »

Public Charities

The Internal Revenue Code divides organizations exempt under Section 501(c)(3) into two distinct tax categories - public charities and private foundations. A Section 501(c)(3) organization is classified as a public charity (1) by being a certain kind of institution, such as a church, university, or hospital, (2) by meeting one of two mathematical public support tests, or (3) by qualifying as a supporting organization to another public charity. Public charities are subject to substantially less regulation under federal tax law, and therefore qualifying as a public charity is usually preferable to private foundation status. We help our clients obtain and maintain public charity status, or take advantage of the greater flexibility of operating as a public charity.

We provide advice on:

  • Public support test calculations.
  • Structuring gifts, grants, and contributions to avoid “tipping” into private foundation status.
  • Compliance with federal and state nonprofit and tax-exemption law applicable to public charities, including Section 4958 of the Internal Revenue Code governing insider transactions.
  • Fiscal sponsorship, permitting a charity to support charitable projects that do not yet have IRS recognition of tax-exempt status.
  • Donor-advised funds, allowing a donor to make immediate tax-deductible contributions while retaining the right to recommend future charitable distributions of the funds.
  • Supporting organizations, which qualify as public charities by virtue of their close relationship with other charities that are publicly supported.
  • Property tax exemptions.

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