What can I do to help ensure that my organization does not unexpectedly lose its public charity classification? An organization will lose its public charity status if it cannot pass the public support test for two consecutive years. If the organization cannot meet the public support test for two consecutive years, it will be reclassified as a private foundation as of the start of the second consecutive year (unless it qualifies as another kind of public charity). To avoid unexpectedly losing your public charity classification, you should keep careful track of your public support information through out the year instead of waiting until the end of the tax year when you are preparing your Schedule A. For more information, see Publication 4221-PC, Compliance Guide for 501(c)(3) Public CharitiesPDF.
