Form 990 - Schedule A - Public Support test?

[hamida_surti]

I have a client who contributed $5,000,000 to his own public charity (501 (C)(3) in 2016. 2020 is the fifth year for the public charity for the support test. In years 2017, 2018, 2019, 2020 there was no public support for the charity. What does the public charity need to do in 2021 to maintain its public charity status

[qbteachmt]

"What does the public charity need to do in 2021 to maintain its public charity status"

There isn't a lot to go on, here. Did that $5m endow a school or fund a ball field or? Not all charities under 501(c)(3) get grants or fees from programs, or donations, for instance. It's a bit more variable than this.

"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)."

From: https://www.irs.gov/charities-non-profits/charitable-organizations/exempt-organizations-annual-repor...

You can find other resources, such as:

https://www.nonprofitaccountingbasics.org/federal-tax-issues/schedule-key-maintaining-public-charity...

I like to work with the local United Way office; they are always current on the requirements, since they do a financial and governance review for anyone who submits for support through their network. They might be of help to you. And depending on where you are, you might find a Not For Profit Network, such as we have one that has brown-bag lunch training for this and other topics, throughout the year. Lastly, your State might have someone to help; I don't live in FL but helped someone there, and their Ag Dept works on NFP issues.

[qbteachmt]

You started this again, and I flagged it to be removed on that duplicate, since you are working on the same issue for the same people, apparently. You can put your updated info right here.

The question of how much to raise or what they need to do is relative; they should have good governance and resources, which is why I gave some links and ideas. Are you clicking the links to read the topics or doing any web searches (and especially IRS), such as:

https://www.irs.gov/charities-non-profits/exempt-organizations-annual-reporting-requirements-form-99...

"My organization is a public charity under sections 509(a)(1) and 170(b)(1)(A)(vi) of the Code, and it received 15 percent of its support from the general public. Because my organization received less than 33-1/3 percent of its support from the general public, how do I show the IRS on the Schedule A that it meets the facts and circumstances test?

If your organization receives more than 10 percent but less than 33-1/3 percent of its support from the general public or a governmental unit, it can qualify as a public charity if it can establish that, under all the facts and circumstances, it normally receives a substantial part of its support from governmental units or the general public. To establish this support, your organization should describe on Part VI of Schedule A the facts and circumstances which establish that the organization is in the nature of an organization that is publicly supported. Regulations section 1.170A-9(f)(3) discusses pertinent facts and circumstances."

You have to know the facts and circumstances. We cannot tell you how much they need to "raise" because they might not need to fundraise. They can have a purpose that qualifies them for a grant, for instance. Or, Their programs and purposes already qualify. We don't know if they need $500 for the year; or they need $5m for the year, so a one-third test is a bit hard for us to specify. That's what you would work on, with the resources.

[sjrcpa]

Why didn't it raise any money in 5 years? Did he intend for it to be a private foundation all along?

What he tell IRS on the exemption application about revenue?