All tax-exempt organizations described in section 501(c)(3) are either private foundations or public charities. By default, these organizations are private foundations unless they qualify as public charities described in section 509(a)(1), (2), (3), or (4).
“Supporting organizations” do not have to be formed for a particular charitable purpose or have to raise a certain amount of public support. Instead, these organizations qualify as public charities because they support the exempt activities of other public charities. Absent this relationship with an existing public charity, supporting organizations generally would be treated as private foundations.
While the future of supporting organizations remains uncertain, with careful attention to governance relationships, organizational structure, operational activities, and procedural rules, operating as a supporting organization can continue to serve as an option for certain types of organizations seeking public charity classification.
Read a January 2016 report [PDF 175 KB] prepared by KPMG LLP: Supporting organizations in the spotlight
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