Public Charity

Know the Tax Code: IRC § 509(a)

To be a public charity, an organization must qualify under § 509(a) of the Tax Code. All charities are subdivided between public charities, which are publicly supported by donations or fees, and private foundations, which are typically supported by a specific, limited faction of supporters. The Tax Code restricts the activities of private foundations more than public charitable organizations.

The Tax Code (and the IRS) considers a charity to be a private foundation until it meets the definition of a public charity under Section 509(a), which includes schools, churches, hospitals, and other organizations that are public supported primarily by gifts, grants, and contributions from a broad sector of donors.