I have a 509(a)(1) organization and would like to use an organization’s 501(c)(3) status (to obtain contributions). Is there a group I can use as an incubator until I get a 501(c)(3) status?
If you have an organization classified under Section 509(a)(1), you already have an organization recognized as a charity under 501(c)(3). You don’t need to use a conduit to raise funds for your program.
Charities are recognized as exempt under Section 501(c)(3) of the Tax Code, but the IRS classifies them as private foundations unless they show that they qualify as public charities under one of the subsections of Section 509(a). (See Ready Reference Page: “Calculating Public Support.”) Therefore, the IRS never gets to classify under Section 509 unless the organization has already qualified as a charity under Section 501(c)(3).
Tuesday, January 30, 2007