What must a 501(c)(3) organization do to be classified as a publicly supported organization (rather than as a private foundation)?

A section 501(c)(3) organization may be classified as a public charity (rather than as a private foundation) on the basis that it is publicly supported. An organization is considered publicly supported if:

1. It normally receives a substantial part of its support from a governmental unit or from contributions from the general public; or,
2. It normally receives more than one-third of its support from gifts, grants, contributions, or gross receipts from activities related to its exempt purposes, and not more than one-third of its support from gross investment income.

In addition, the organization must meet the requirements of detailed support tests.

Generally, an organization computes its support over a five-year period that includes the current tax year. The organization must establish that it meets the public support test by showing that it is publicly supported on its Schedule A to Form 990, Return of Organization Exempt From Income Tax or Form 990-EZ, Short Form Return of Organization Exempt From Income Tax, if it is required to file one of those returns.

Additional information

On-line mini-course - Foundation classification

Action required by small organization required to file Form 990-N