In short
A charitable organization avoids private foundation status if it is publicly supported, generally by receiving at least one-third of its support from the general public, government and other public charities, measured over 5 years.
Key takeaways
- An organization with at least 10% public support can qualify under a facts-and-circumstances test.
- Churches, schools and hospitals are public charities by the nature of their activities.
- Large gifts from one donor count as public support only up to 2% of total support.
Where it's tested
REG: Exempt Organizations Basics — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
The principal distinction between a public charity and a private foundation is that a private foundation: