Public CHarities

A section 501(c)(3) charitable organization may operate as either a public charity or a private foundation.  Public charities include organizations that:

• Conduct specific charitable activities, such as schools, churches, medical research centers, hospitals and others;
• Receive more than a third of their revenue from public sources or from the performance of their charitable activities, such as museums, symphonies, ballet companies and theaters; or
• Have a close relationship with another public charity such that they support that public charity. 

There are numerous advantages to being a public charity versus a private foundation including a larger charitable deduction for donors and less onerous operational rules.  However, public charities must meet very specific rules under the federal tax laws.

Relevant considerations for public charities are:

• Fundraising activities
• Charitable programs and the revenues they generate
• Community leaders’ participation as board members
• Endowment and investment goals
• Charitable solicitation and registration requirements