Exempt Organizations Annual Reporting Requirements - Form 990, Schedules A and B: Reporting Issues for Section 509(a)(3) Supporting Organizations
Supporting organizations described in Code section 509(a)(3) are required to answer a number of questions in Form 990, Schedule A, Part I, line 11. Does the organization’s answer to any of these questions affect its qualification as a supporting organization under section 509(a)(3)?
Yes. Section 509(a)(3) supporting organizations are subject to a number of rules affecting their status. The rules vary somewhat depending on their Type. The organization’s answer to one or more of these questions on line 11 may indicate that it does not qualify under as a supporting organization under section 509(a)(3) and instead must file Form 990-PF as a private foundation. The questions in Schedule A, Part I, line 11 ask about the organization’s compliance with the following rules:
- A section 509(a)(3) organization must have a Type I, Type II, Type III-functionally integrated or Type III-other relationship with its supported organizations as defined in section 509(f)(3) (Schedule A, Part I, lines 11a-d).
- A section 509(a)(3) organization cannot be controlled by one or more disqualified persons (line 11e).
- A Type I or Type III organization cannot accept a gift or contribution from a person who controls the governing body of a supported organization, or from certain related persons (line 11g).
- A section 509(a)(3) organization must support one or more supported organizations (line 11h(i)-(iii)).
- A Type III organization generally must list its supported organizations by name in its governing document (line 11h(iv)).
- A Type III organization may not support a foreign organization (line 11h(vi)).