Section 509(a)(3) Supporting Organizations
A supporting organization is a charity that carries out its exempt purposes by supporting other exempt organizations, usually other public charities. This classification is important because it is one means by which a charity can avoid classification as a private foundation, a status that is subject to a more restrictive regulatory regime.
Of course, supporting another public charity is not enough by itself to warrant status as a public charity – many private foundations support public charities as well. A supporting organization generally warrants public charity status because it has a relationship with its supported organization sufficient to ensure that the supported organization is effectively supervising or paying particular attention to the operations of the supporting organization.
A supporting organization is a Type I, Type II or Type III supporting organization depending on the relationship it has with its supported organization(s). A Type III supporting organization is either functionally integrated (FISO) or non-functionally integrated (non-FISO). This distinction is important because of additional restrictions that apply to contributions and certain grants made to non-FISOs.
Change in Status
An organization wishing to change its public charity classification in IRS records, including a supporting organization requesting a determination as to whether it is a Type I, II or III supporting organization, must file Form 8940, Request for Miscellaneous Determination.
- Annual Filing Requirements for Supporting Organizations
- Reliance Criteria for Private Foundations and Organizations Sponsoring Donor-Advised Funds Making Grants to Supporting Organizations
- Final and temporary regulations - Type III supporting organizations
- Memorandum from EO Rulings and Agreements to EO Determinations - processing request for classification as Type III supporting organization
- Publication 557, Tax-Exempt Status for Your Organization
- Report to Congress on Supporting Organizations and Donor Advised Funds (December 2011)
- Special rules apply to excess benefit transactions for certain supporting organizations.
- Code section 4943 excess business holdings rules apply to certain supporting organizations.