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.
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