IRS Public vs Private Foundations

We are excited to share that we have been re-classified as a public charity. A public charity receives income vastly from the public, hence the name. Public charities receive grants from individuals, government, and private foundations.

The public support test proves this:

The simplest definition of the IRS public support test states that at least 1/3 (33.3%) of donations must be given by donors who give less than 2% of the nonprofit’s overall receipts. For organizations that also get funds from sales of goods or services, such revenue also counts toward the public support test.

I know you may wonder, “Why was IBF not a public charity all along?” This is due to when applying for 501(c)(3) status; the IRS will recognize qualifying nonprofits as a private foundation by default unless a cause is shown and a request made that it be approved as a public charity. Filing requirements proved to be hurdles as we run our organization as lean as possible. This, alongside an IRS backlog due to Covid-19, can explain why we are now re-classified; however, we have operated based on a public charity all along. This allowed our case for re-classification to be processed with any issues.

What does this mean going forward?

As a public charity, we will have more autonomy to support more individuals with paralysis. Additionally, this allows multiple methods for you to help us going forward. We are now on Amazon Smile, which at no cost to you donates a portion of your purchases to us. Check out this link for more information and further reading. Also, we can now receive contributions from more donor-advised funds (DAF) like Schwab and Fidelity Charitable.

As always, feel free to reach out with any questions surrounding this change.