How to Show Your Organization Is a Public Charity

Vernon: So, how does my organization show the IRS that it is a public charity?

Coach: If your organization is not one of the types defined by statute as a public charity, you will need to demonstrate that you receive broad financial support. [11b] More specifically, you must demonstrate that your 501(c)(3) either:

• Receives a substantial part of its support in the form of contributions from publicly supported organizations, governmental units, and/or the general public, or

• Normally receives no more than one-third of its support from gross investment income and more than one-third of its support from contributions, membership fees, and gross receipts from activities related to its exempt functions.

The IRS applies specific tests to make sure these conditions are met.

Popup: For more information on what constitutes broad financial support, see Publication 557, Tax-Exempt Status for Your Organization.