What is a Section 509(a)(3) Supporting Organization? Can a Section 501(c)(3) organization avoid private foundation status by supporting other than a charity, such as a Section 501(c)(6) organization?

Under Title 26 of the Internal Revenue Code, all organizations described in section 501(c)(3) are considered private foundations, unless one of four exceptions applies. See 26 U.S.C. § 509(a)-(a)(4) (defining “private foundation”).

Those exceptions are, briefly: (1) organizations described in 26 U.S.C. § 170(b)(1)(A) and to whom charitable contributions may be given; (2) publicly supported organizations, as described in paragraph (2) of section 509(a); (3) organizations organized and operated exclusively for the benefit of, to perform the functions of, or to carry out the purposes of one or more specified organizations described in paragraph (1) or (2) of section 509(a); and (4) an organization which is organized and operated exclusively for testing for public safety. See 26 U.S.C. § 509(a)-(a)(4).

This Freeman Law blog focuses on supporting organizations, being those described in paragraph (3) of section 509(a).

Section 509(a)(3)—Supporting Organization.

Section 509(a)(3) is an exception to private foundation status. Section 509(a)(3) describes an organization which:

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