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 than private foundations, and therefore qualifying as a public charity is usually preferable. We help our clients obtain and maintain public charity status, and take advantage of the greater flexibility of operating as a public charity.
Areas of Focus
- 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.
- Conducting fundraising activities and compliance with state charitable solicitation registration requirements.
- 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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Related Upcoming Events
In-Person Conference January 19, 2023
UT Law’s 40th Annual Nonprofit Organizations Institute Conference - Session: "A View of the Sector"
Session: “A View of the Sector”
8:30 a.m. – 9:30 a.m. CT
Co-presenter: Alex Reid, Baker & Hostetler LLP
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Past Events
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In-Person Conference October 27, 2022
National Network of Fiscal Sponsors - Session: Riskspotting: Catching (and Resolving) the Red Flags With New Projects
Thu 10/27 || 1:30 – 2:45 pm ( 75 minutes) || Breakout Sessions Block 1
Riskspotting: Catching (and Resolving) the Red Flags With New Projects: Karl Mill and Ehsan Ali, Mill Law Center; Jinna Kwak, Adler & Colvin
If you have any questions about breakout sessions or anything else about the event, please email fiscalsponsors (at) gmail.com.
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Center for Volunteer and Nonprofit Leadership, Emerging Leaders Program: “Nonprofit Legal Compliance”
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Grant Thornton, LLP - “What’s New in Not-for-Profit Law?”
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Webinar March 6, 2018
Continuing Education of the Bar (CEB): "Representing Charitable Nonprofits: Helping Nonprofits Engage with Confidence in Ongoing Operations"
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