Sch A_Public Charity Status and Public

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2014

Instructions for Schedule A
(Form 990 or 990-EZ)

Department of the Treasury
Internal Revenue Service

Public Charity Status and Public Support

DRAFT AS OF
August 14, 2014

Section references are to the Internal Revenue
Code unless otherwise noted.

it must file a complete return and provide
all of the information requested, including
the required schedules.

Future developments. For the latest
information about developments related to
Form 990 and its instructions, such as
legislation enacted after they were
published, go to www.irs.gov/form990.

Any organization that is exempt
from tax under section 501(c)(3)
but is a private foundation and
not a public charity should not file Form
990, Form 990-EZ, or Schedule A (Form
990 or 990-EZ), but should file Form
990-PF, Return of Private Foundation or
Section 4947(a)(1) Trust Treated as a
Private Foundation. See instructions to
Part I.

What's New

New Schedule A Parts IV and V have
been added (and Part I, line 11 modified)
for section 509(a)(3) supporting
organizations to demonstrate compliance
with the detailed rules pertinent to them,
including new regulations.
The instructions for Schedule A, Part II,
clarify that an organization may complete
Part II even if it checks a public charity box
in Part I other than for section
170(b)(1)(A)(vi).

General Instructions

Note. Terms in bold are defined in the
Glossary of the Instructions for Form 990,
Return of Organization Exempt From
Income Tax.

Purpose of Schedule

Schedule A (Form 990 or 990-EZ) is used
by an organization that files Form 990 or
Form 990-EZ, Short Form Return of
Organization Exempt From Income Tax, to
provide the required information about
public charity status and public support.

Who Must File

An organization that answered “Yes” to
Form 990, Part IV, line 1, must complete
and attach Schedule A (Form 990 or
990-EZ) to Form 990. Any section
501(c)(3) organization (or organization
treated as such) that files a Form 990-EZ
must complete and attach this schedule to
Form 990-EZ. These include:
Organizations that are described in
section 501(c)(3) and are public
charities;
Organizations that are described in
sections 501(e), 501(f), 501(j), 501(k), or
501(n); and
Nonexempt charitable trusts
described in section 4947(a)(1) that are
not treated as private foundations.
If an organization is not required to file
Form 990 or 990-EZ but chooses to do so,
Aug 12, 2014

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Accounting Method

When completing Schedule A (Form 990
or 990-EZ), the organization must use the
same accounting method it checked on
Form 990, Part XII, line 1, or Form 990-EZ,
line G. The organization must use this
accounting method in reporting all
amounts on Schedule A (Form 990 or
990-EZ), regardless of the accounting
method it used in completing Schedule A
(Form 990 or 990-EZ) for prior years,
except that in Part V, Sections D and E,
distributions must be reported on the cash
receipts and disbursements method.
If the accounting method the
organization used in completing the 2013
Schedule A (Form 990 or 990-EZ) was
different from the accounting method
checked on the 2014 Form 990, Part XII,
line 1, or the 2014 Form 990-EZ, line G,
the organization should not report in either
Part II or Part III the amounts reported in
the applicable columns of the 2013
Schedule A (Form 990 or 990-EZ).
Instead, the organization should report all
amounts in Part II or Part III using the
accounting method checked on the 2014
Form 990, Part XII, line 1, or the 2014
Form 990-EZ, line G.
If the organization changed its
TIP accounting method from a prior
year, it should provide an
explanation in Schedule O (Form 990 or
990-EZ), Supplemental Information to
Form 990 or 990-EZ.
Example 1. An organization checks
“Cash” on Form 990, Part XII, line 1. It
should report the amounts in Part II or Part
III using the cash method. If the
organization filed a 2013 Schedule A
(Form 990 or 990-EZ) using the cash
method, it should report in the 2010
Cat. No. 11294Q

through 2013 columns on the 2014
Schedule A (Form 990 or 990-EZ) the
same amounts that it reported in the 2010
through 2013 columns on the 2013
Schedule A (Form 990 or 990-EZ).
Example 2. An organization checks
“Accrual” on Form 990, Part XII, line 1.
The organization reports grants on Form
990, Part VIII, line 1, in accordance with
the Statement of Financial Accounting
Standards, SFAS 116 (ACS 958), (see
instructions for Form 990, Part VIII, line 1).
During the year, the organization receives
a grant to be paid in future years. The
organization should report the grant's
present value on the 2014 Schedule A
(Form 990 or 990-EZ). The organization
should report accruals of present value
increments to the unpaid grant on
Schedule A (Form 990 or 990-EZ) in future
years.

Specific Instructions
Part I. Reason for Public
Charity Status
Lines 1–11 (in general)

Check only one of the boxes on lines 1
through 11 to indicate the reason the
organization is a public charity for the
tax year. The reason can be the same as
stated in the organization's tax-exempt
determination letter from the IRS
(“exemption letter”) or subsequent IRS
determination letter, or it can be different.
An organization that does not check any of
the boxes on lines 1 through 11 should not
file Form 990, Form 990-EZ, or
Schedule A (Form 990 or 990-EZ) for the
tax year, but should file Form 990-PF
instead.
If an organization believes there is
more than one reason why it is a public
charity, it should check only one box but
can explain the other reasons it qualifies
for public charity status in Part VI. An
organization that claims a public charity
status other than section 170(b)(1)(A)(vi)
can also demonstrate that it qualifies
under section 170(b)(1)(A)(vi) by
completing Part II; it may want to do so for
purposes such as qualifying for the first
Special Rule in Schedule B (Form 990,
990-EZ, or 990-PF), Schedule of
Contributors, by meeting the 331 3%
support test.

The IRS does not update its records on
an organization's public charity status
based on a change the organization
makes on Schedule A (Form 990 or
990-EZ). Thus, an organization that
checks a public charity status different
from the reason stated in its exemption
letter or subsequent determination letter,
although not required, may submit a
request to the IRS Exempt Organizations
Determinations Office for a determination
letter confirming that it qualifies for the
new public charity status if the
organization wants the IRS records to
reflect that new public charity status (also
referred to as “private foundation status”).
See Form 8940, Request for
Miscellaneous Determination, for
instructions. A $400 user fee must be
submitted with such a request. See
Section 6.10 of Rev. Proc. 2014-8, 2014-1
I.R.B. 242.

170(b)(1)(A)(vi). Instead, it meets the
requirements for public charity status as a
supporting organization under section
509(a)(3). The organization should:
1. Check the box for line 11 and either
line 11a, 11b, 11c, or 11d;
2. Complete lines 11e and 11f;
3. Complete the table on line 11g; and
4. Complete Part IV and (if applicable)
Part V.

literature of its own, established places of
worship, regular congregations, regular
religious services, Sunday schools for the
religious instruction of the young, and
schools for the preparation of its ministers.
The IRS generally uses a combination of
these characteristics, together with other
facts and circumstances, to determine
whether an organization is considered a
church for federal tax purposes.

DRAFT AS OF
August 14, 2014

A subordinate organization of a
group exemption that is filing its own
return, but has not received its own tax
exemption determination letter from the
IRS, should check the public charity status
box which most accurately describes its
public charity status.
An organization that does not know the
public charity status stated in its
exemption letter or subsequent
determination letter should call the
Exempt Organizations Customer Account
Services toll free at 1-877-829-5500 or
write to:
Internal Revenue Service
TE/GE Customer Account Services
P.O. Box 2508
Cincinnati, OH 45201
See the following examples:
Example 1. The organization received
an exemption letter that it is a public
charity under section 170(b)(1)(A)(vi). For
the tax year, it meets the requirements for
public charity status under section
170(b)(1)(A)(vi). The organization should
check the box on line 7 and complete
Part II.
Example 2. The organization received
an exemption letter that it is a public
charity under section 170(b)(1)(A)(vi). For
the tax year, it does not meet the
requirements for public charity status
under section 170(b)(1)(A)(vi). Instead, it
meets the requirements for public charity
status under section 509(a)(2). The
organization should check the box on
line 9 and complete Part III.
Example 3. The organization received
an exemption letter that it is a public
charity under section 509(a)(2). For the
tax year, it does not meet the
requirements for public charity status
under section 509(a)(2) or

Example 4. The organization received
an exemption letter that it is a supporting
organization under section 509(a)(3).
Based on Rev. Proc. 2014-10, 2014-2
I.R.B. 293, the organization submitted a
Form 8940 request to the IRS to change
its classification to public charity status
under section 509(a)(2). For the tax year,
it meets the requirements of section
509(a)(2). The organization received a
determination letter that it has been
reclassified as a public charity under
section 509(a)(2). The organization should
check the box on line 9 and complete Part
III.
Example 5. The organization received
an exemption letter that it is a public
charity under section 170(b)(1)(A)(vi). For
the tax year, it does not meet the
requirements for public charity status
under section 170(b)(1)(A)(vi) or
509(a)(2), or as a supporting organization
under section 509(a)(3). Nor does it meet
the requirements for public charity status
under any other provision of the Internal
Revenue Code. The organization is a
private foundation and should not file
Form 990, Form 990-EZ, or Schedule A
(Form 990 or 990-EZ) for the tax year but
should file Form 990-PF instead.

Example 6. The organization received
an exemption letter that it is a supporting
organization under section 509(a)(3). The
letter does not state which type of
supporting organization it is. The
organization should review the instructions
for lines 11a–11d to determine which type
best describes the organization. The
organization may wish to file Form 8940 to
request a determination of type.
Line 1. Check the box for a church,
convention of churches, or association of
churches. Pub. 1828, Tax Guide for
Churches and Religious Organizations,
lists certain characteristics generally
attributed to churches. These attributes of
a church have been developed by the IRS
and by court decisions. They include:
distinct legal existence, recognized creed
and form of worship, definite and distinct
ecclesiastical government, formal code of
doctrine and discipline, distinct religious
history, membership not associated with
any other church or denomination,
organization of ordained ministers,
ordained ministers selected after
completing prescribed courses of study,
-2-

Line 2. Check the box for a school
whose primary function is the presentation
of formal instruction, which regularly has a
faculty, a curriculum, an enrolled body of
students, and a place where educational
activities are regularly conducted. A
private school must have a racially
nondiscriminatory policy toward its
students. For details about these
requirements, see Schedule E (Form 990
or 990-EZ), Schools, and its related
instructions.
An organization that checks the
box on line 2 must also complete
Schedule E (Form 990 or
990-EZ), Schools.

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Line 3. Check the box for an organization
whose main purpose is to provide hospital
or medical care. A rehabilitation institution
or an outpatient clinic can qualify as a
hospital if its principal purposes or
functions are the providing of hospital or
medical care, but the term does not
include medical schools, medical research
organizations, convalescent homes,
homes for children or the aged, or
vocational training institutions for
handicapped individuals.
Check the box on line 3 also for a
cooperative hospital service organization
described in section 501(e).
The definition of hospital for
Schedule A (Form 990 or
990-EZ), Part I, is different from
the definition for Schedule H (Form 990),
Hospitals. Accordingly, see Who Must File
in the Instructions for Schedule H (Form
990) about whether the organization also
is required to complete Schedule H (Form
990).

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Line 4. Check the box for an organization
whose principal purpose or function is to
engage in medical research, and that is
directly engaged in the continuous active
conduct of medical research in
conjunction with a hospital. The hospital
must be described in section 501(c)(3) or
operated by the federal government, a
state or its political subdivision, a U.S.
possession or its political subdivision, or
the District of Columbia.
If the organization primarily gives funds
to other organizations (or grants and
scholarships to individuals) for them to do
the research, the organization is not a
medical research organization.

Instructions for Schedule A (Form 990 or 990-EZ)

The organization is not required to be
an affiliate of the hospital, but there must
be a joint effort by the organization and the
hospital to maintain continuing close
cooperation in the active conduct of
medical research.
The definition of medical
research for Schedule A (Form
990 or 990-EZ), Part I, is different
from the definition for Schedule H (Form
990), Hospitals. Accordingly, research that
is medical research for purposes of
determining whether an organization is a
medical research organization is not
necessarily medical research for
Schedule H (Form 990) reporting
purposes.

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section 501(c)(3) should check this box.
See Rev. Rul. 60-384, 1960-2 C.B. 172.
Line 7. Check the box and complete Part
II if the organization meets one of the
section 170(b)(1)(A)(vi) public support
tests. See instructions for Part II regarding
how an organization can qualify as a
publicly supported organization under
section 170(b)(1)(A)(vi).

(for example, because the organization
has made significant changes to its
structure or operations resulting in it no
longer qualifying as the type of supporting
organization indicated in its letter), provide
an explanation in Part VI. If the
organization does not check the box on
line 11e, it should check the box on
line 11a, 11b, 11c, or 11d that best
describes the type of supporting
organization it is.

DRAFT AS OF
August 14, 2014

Assets test/expenditure test. An
organization qualifies as a medical
research organization if its principal
purpose is medical research, and if it
devotes more than half its assets, or
spends at least 3.5% of the fair market
value of its endowment, directly in
conducting medical research. Either test
can be met based on a computation
period consisting of the immediately
preceding tax year or the immediately
preceding four tax years.
If an organization does not satisfy
either the assets test or the expenditure
test, it can still qualify as a medical
research organization based on the
circumstances involved.
These tests are discussed in
Regulations sections 1.170A-9(d)(2)(v)
and (vi). Under these tests, value the
organization's assets as of any day in its
tax year using the same day every year,
and value the endowment at fair market
value, using commonly accepted valuation
methods. See Regulations section
20.2031.
Line 5. Check the box and complete Part
II if the organization receives and
manages property for and expends funds
to benefit a college or university that is
owned or operated by one or more states
or political subdivisions. The school must
be an organization described in the
instructions for line 2.
Expending funds to benefit a college or
university includes acquiring and
maintaining the campus, its buildings and
equipment, granting scholarships and
student loans, and making any other
payments in connection with the normal
functions of colleges and universities.
The organization must meet the same
public support test described later for
line 7. See Rev. Rul. 82-132, 1982-2 C.B.
107.
Line 6. Only a federal, state, or local
government or governmental unit that
has received an exemption letter
recognizing it as exempt from tax under

Line 8. Check the box and complete Part
II if the organization is a community trust
and meets a section 170(b)(1)(A)(vi)
public support test. A community trust is a
charity that attracts large contributions
for the benefit of a particular community or
area, often initially from a small number of
donors, and is generally governed by
representatives of its particular community
or area. See Regulations sections
1.170A-9(f)(10), (11), and (12).
A community trust claiming it
qualifies as a public charity
CAUTION
should check the box on line 8
whether it is structured as a corporation or
as a trust.

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Line 9. Check the box and complete Part
III if the organization meets both of the
section 509(a)(2) support tests. See the
instructions for Part III regarding how an
organization can qualify as a publicly
supported organization under section
509(a)(2).
Line 10. Check the box only if the
organization has received a ruling from the
IRS that it is organized and operated
primarily to test for public safety.
Lines 11 and 11a–11d. If the
organization is a supporting organization,
check the box for line 11 and then check
the appropriate box for line 11a, 11b, 11c,
or 11d to indicate the type of supporting
organization it is. The organization must
also complete lines 11e and 11f, the table
on line 11g, and Part IV. If the organization
is a Type III non-functionally integrated
supporting organization, it must also
complete Part V.
For more information about supporting
organizations, see Regulations sections
1.509(a)-4 and 1.509(a)-4T, and sections
509(a)(3) and 509(f). For a brief overview
of the requirements for qualification as a
supporting organization, and the different
types of supporting organizations, see
Pub. 557, Tax Exempt Status for Your
Organization, and visit www.irs.gov/
Charities- &-Non-Profits/
Section-509(a)(3)-SupportingOrganizations.
Use the information later to determine
the supporting organization's type. If the
organization checks the box on line 11e,
the letter the organization received from
the IRS identifies its type. If the box
checked on any of lines 11a through 11d
is different from the type stated in the letter

Instructions for Schedule A (Form 990 or 990-EZ)

-3-

All supporting organizations,
regardless of type, must be
CAUTION
responsive to the needs or
demands of one or more supported
organizations, and must constitute an
integral part of, or maintain a significant
involvement in, the operations of one or
more supported organizations. Although
Type III supporting organizations have
specific “responsiveness” and “integral
part” tests that must be met, the
relationship between a Type I or Type II
supporting organization and its supported
organization(s) must also include these
responsiveness and integral part
characteristics. The ability of the
supported organization(s) in a Type I or
Type II relationship effectively to control
the supporting organization's board
generally ensures that these
characteristics are present. If they are not
present, however, do not check any box
for lines 11a through 11d. For more
information, see Regulations sections
1.509(a)-4(f)(3) and (4).

!

Type I. A Type I supporting
organization is operated, supervised, or
controlled by one or more publicly
supported organizations. If the
organization otherwise qualifies as a
supporting organization and can answer
“Yes” to the following question, check the
box for Type I:
Do the supported organizations have a
substantial degree of direction over the
policies, programs, and activities of the
supporting organization, typically by
ensuring that the governing body,
officers, or membership of the supported
organizations may regularly appoint or
elect a majority of the supporting
organization's directors or trustees?
Type II. A Type II supporting
organization is supervised or controlled
in connection with one or more publicly
supported organizations. If the
organization otherwise qualifies as a
supporting organization and can answer
“Yes” to the following question, check the
box for Type II:
Do the same persons, such as
directors, trustees, and officers, supervise
or control the supported organization(s)
and the supporting organization?
Type III—Functionally integrated.
Check this box if the organization is not
described in Type I or Type II above and

qualifies as a Type III functionally
integrated supporting organization by
meeting the following requirements:
1. The organization meets the
notification requirement described in
Part IV, Section D, line 1;
2. The organization meets the
responsiveness test (both the relationship
requirement and the significant voice
requirement) described in Part IV,
Section D, lines 2 and 3; and
3. The organization meets one of the
alternative integral part tests described in
Part IV, Section E.

Line 11g. An organization checking a box
on line 11a, 11b, 11c, or 11d must
complete the table on line 11g.
Columns (i) and (ii). Enter the name
and employer identification number (EIN)
for each supported organization
counted on line 11f. If the organization had
more than five supported organizations
during the tax year, enter the additional
organizations on duplicate pages of
Schedule A, Part I. Use as many duplicate
copies as needed, and number each
page.
Column (iii). For each supported
organization named in column (i), show
which line number (from lines 1 through 9)
best describes the supported
organization. For example, if the
organization supported a hospital, enter
"3" in column (iii). If the organization
supported a federal, state, or local
governmental unit, or foreign
government, enter "6" in column (iii).
Column (iv). Check “Yes” if the
supported organization named in column
(i) is specifically named as a supported
organization in the organization's
declaration of trust, articles of
incorporation, or other governing
document.
Column (v). Enter the total amount of
monetary support paid to, or for the benefit
of, the supported organization named in
column (i) during the tax year. Such
monetary support may include making
payments to or for the use of individual
members of the charitable class benefited
by the supported organization (such as
scholarships), and to 501(c)(3) public
charities operated, supervised, or
controlled directly by or in connection with
the supported organization. See
Regulations section 1.509(a)-4(e). If no
monetary support was provided during the
tax year, enter “-0-.”
Column (vi). In this column, the
organization may (but is not required to)
provide an estimate of the fair market
value of goods, other property, services,
and use of facilities that is provided to or
for the benefit of the supported
organizations during the tax year.
Describe in Part VI any such goods, other
property, services, and use of facilities,
whether or not an amount is reported for
them in column (vi).

the organization had any support during
the period. If the organization checks the
box in Part II, on line 13, it should stop
there and not complete the rest of Part II.
If the organization checked a box
in Part I, on line 5, 7, or 8 and also
checks the box in Part II, on
line 18, the organization should complete
Part III to determine if it qualifies as a
publicly supported organization under
section 509(a)(2). If it does qualify, the
organization should instead check the box
in Part I, on line 9.

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DRAFT AS OF
August 14, 2014

Type III—Non-functionally
integrated. Check this box if the
organization is not described as a Type I,
Type II, or Type III functionally integrated
supporting organization and qualifies as a
Type III non-functionally integrated
supporting organization by meeting the
following requirements:
1. The organization meets the
notification requirement described in
Part IV, Section D, line 1;
2. The organization meets the
responsiveness test (both relationship
requirement and significant voice
requirement) described in Part IV,
Section D, lines 2 and 3; and
3. The organization meets the integral
part test by meeting either (a) the
distribution and attentiveness
requirements described in Part V or (b) the
alternative integral part test for certain
trusts in existence on November 20, 1970,
described in Part V, line 1.
Line 11e. The organization's exemption
letter or subsequent determination letter
may state the type of supporting
organization it is. If it does, check the box
on this line. If the letter does not state the
type, or if the letter states Type III but does
not specify whether functionally integrated
or non-functionally integrated, leave this
line blank.
A grantor to a section 509(a)(3)
supporting organization, acting in good
faith, can rely on this letter in determining
whether the organization is a Type I, Type
II, Type III functionally integrated, or Type
III non-functionally integrated supporting
organization. See Rev. Proc. 2011-33,
2011-25 I.R.B. 887 and Notice 2014-4,
2014-2 I.R.B. 274.
Line 11f. A supporting organization must
be organized and operated exclusively to
support or benefit one or more specified
publicly supported organizations. Please
write in the space provided the number of
supported organizations. Include all
supported organizations that the
organization was organized to support at
any time during the tax year, whether or
not they actually received support during
the tax year.

Part II. Support Schedule
for Organizations
Described in Sections
170(b)(1)(A)(iv) and
170(b)(1)(A)(vi)
If the organization checked a box
in Part I, on line 5, 7, or 8, it
CAUTION
should complete Part II and insert
the appropriate dollar amounts. Do not
leave Part II blank or report only zeros if

!

-4-

Public Support Test. For an
organization to qualify as a publicly
supported organization under section
170(b)(1)(A)(vi), either:
331 3% or more of its total support must
come from governmental agencies,
contributions from the general public, and
contributions or grants from other public
charities; or
10% or more of its total support must
come from governmental agencies,
contributions from the general public, and
contributions or grants from other public
charities and the facts and circumstances
indicate it is a publicly supported
organization.
Note. An organization will not meet either
of these public support tests if almost all of
its support comes from gross receipts
from related activities and an insignificant
amount of its support comes from
governmental units and contributions
made directly or indirectly by the general
public.
Public support is measured using a
5-year computation period that includes
the current and four prior tax years
(including short years). If the
organization's current tax year or any of its
four prior tax years were short years,
explain in Part VI.
If the organization was not a section
501(c)(3) organization for the entire 5-year
period in Part II, report amounts only for
the years the organization was a section
501(c)(3) organization.
Line 1. Do not include any “unusual
grants.” See Unusual grants, later. Include
membership fees only to the extent to
which the fees are payments to provide
support for the organization rather than to
purchase admissions, merchandise,
services, or the use of facilities. To the
extent that the membership fees are
payments to purchase admissions,
merchandise, services, or the use of
facilities in a related activity, report the
membership fees on line 12. To the extent
that the membership fees are payments to
purchase admissions, merchandise,
services, or the use of facilities in an
unrelated business activity, report the
membership fees on line 9. See

Instructions for Schedule A (Form 990 or 990-EZ)

Regulations section 1.170A-9(f)(7)(iv).
Include qualified sponsorship payments
under section 513(i).
Noncash contributions. Use any
reasonable method to determine the value
of noncash contributions reported on
line 1.
Do not report any donations of services
(such as the value of donated advertising
space or broadcast air time) or donations
of use of materials, equipment, or
facilities, on line 1 as gifts, grants, or
contributions. Donated services and
facilities from a governmental unit only
are reported on line 3.

bequests from disinterested persons and
are:
1. Attracted because of the
organization's publicly supported nature,
2. Unusual and unexpected because
of the amount, and
3. Large enough to endanger the
organization's status as normally meeting
either the 331 3% public support test or the
10% facts and circumstances test.

Line 1. Example—List of unusual
grants
Year

▶ 2014

Description

▶

Name
Mr.
Distinguished Donor

Undeveloped land

▶

DRAFT AS OF
August 14, 2014

Loss on uncollectible pledge. If an
organization records a loss on an
uncollectible pledge that it reported on a
prior year's Schedule A, it should deduct
that loss from the contribution amount for
the year in which it originally counted that
contribution as revenue. For example, if in
the prior tax year the organization reported
a pledged contribution with a then-present
value of $50,000 in Part II, line 1, column
(e), but learned during the current tax year
that it would not receive any of that
pledged contribution, it should deduct the
$50,000 from the amount reported in Part
II, line 1, column (d), for the prior tax year.

Support from a governmental unit.
Include on line 1 support received from a
governmental unit. This includes
contributions, but not gross receipts from
exercising or performing the organization's
tax-exempt purpose or function, which
should be reported on line 12. An amount
received from a governmental unit is
treated as gross receipts from exercising
or performing the organization's
tax-exempt purpose or function if the
purpose of the payment is primarily to
serve the direct and immediate needs of
the payor governmental unit, and is
treated as a contribution, if the purpose is
primarily to provide a direct benefit to the
public. For example, a payment to
maintain library facilities that are open to
the public should be treated as a
contribution. See Regulations section
1.170A-9(f)(8) and Rev. Rul. 81-276,
1981-2 C.B. 128. Refer to the instructions
for Form 990, Part VIII, lines 1e and 2, for
more examples addressing the distinction
between government payments that are
contributions and government payments
that are gross receipts from activities
related to the organization's tax-exempt
purpose or function. Medicare and
Medicaid payments are treated as gross
receipts from patients rather than as
contributions from the government payor
for purposes of the public support test.
See Rev. Rul. 83-153, 1983-2 C.B. 48.

For a list of other factors to be
considered in determining whether a grant
is an unusual grant, see Regulations
section 1.509(a)-3(c)(4).
An unusual grant is excluded even if
the organization receives or accrues the
funds over a period of years.
Do not report gross investment income
items as unusual grants. Instead, include
all investment income on line 8.
See Rev. Rul. 76-440, 1976-2 C.B. 58;
Regulations section 1.170A-9(f)(6)(ii); and
Regulations sections 1.509(a)-3(c)(3) and
(4) for details about unusual grants.
Include in Part VI a list showing the
amount, but not the grantor, of each
unusual grant actually received each year
(if the cash accounting method is used) or
accrued each year (if the accrual
accounting method is used).
Do not include the names of the
grantors because Part VI will be
CAUTION
made available for public
inspection.

!

Unusual grants recordkeeping. An
organization that received any unusual
grants during the 5-year period should
also keep for its records a list showing, for
each year, the name of the contributor, the
date and amount of the grant, and a brief
description of the grant. If the organization
used the cash method for the applicable
year, show only the amounts the
organization actually received during that
year. If the organization used the accrual
method for the applicable year, show only
the amounts the organization accrued for
that year. An example of this list is given
later.
Do not file this list with the
organization's Form 990 or
CAUTION
990-EZ because it may be made
available for public inspection.

!

Unusual grants. Unusual grants
generally are substantial contributions and

Instructions for Schedule A (Form 990 or 990-EZ)

-5-

Date of Grant
January 15, 2014

Amount of Grant
$600,000

▶

Conservation easements and qualified
conservation contributions. The
organization must report any qualified
conservation contributions and
contributions of conservation easements
consistently with how it reports revenue
from such contributions in its books,
records, and financial statements and in
Form 990, Part VIII, Statement of
Revenue.
Reporting contributions not reported
as revenue. If the organization reports
any contributions on line 1 of Schedule A
(Form 990 or 990-EZ), Part II, that it does
not report on Form 990, as revenue in Part
VIII or as assets in Part X, or as revenue or
assets on Form 990-EZ, explain in Part VI
the basis for characterizing such transfers
as contributions but not as revenue or
assets. For example, if an organization is
a community foundation that receives and
holds a cash transfer for another
tax-exempt organization and reports
contributions of such property on
Schedule A (Form 990 or 990-EZ), Part II,
line 1, without reporting it on Form 990, as
revenue in Part VIII or assets in Part X,
explain the basis for characterizing the
property as contributions but not as
revenue or assets.
Line 2. Enter tax revenue levied for the
organization's benefit by a governmental
unit and either paid to the organization or
expended on its behalf. Report this
amount whether or not the organization
includes this amount as revenue on its
financial statements or elsewhere on Form
990 or 990-EZ.
Line 3. Enter the value of services or
facilities furnished by a governmental
unit to the organization without charge.
Do not include the value of services or
facilities generally furnished to the public
without charge. For example, include the
fair rental value of office space furnished
by a governmental unit to the organization
without charge but only if the
governmental unit does not generally
furnish similar office space to the public
without charge. Report these amounts
whether or not the organization includes
these amounts as revenue on its financial

statements or elsewhere on Form 990 or
990-EZ.
Line 5. Enter in column (f) the portion of
total contributions by each individual,
trust, or corporation included on line 1 for
the years reported that exceeds 2% of the
amount reported on line 11, column (f).
However, the 2% limitation does not apply
to contributions from organizations
qualifying as publicly supported
organizations under section
170(b)(1)(A)(vi), governmental units
described in section 170(b)(1)(A)(v), and
other organizations, such as the following,
but only if they also qualify as publicly
supported organizations under section
170(b)(1)(A)(vi):
Churches described in section
170(b)(1)(A)(i);
Educational institutions described in
section 170(b)(1)(A)(ii);
Hospitals described in section
170(b)(1)(A)(iii); and
Organizations operated for the benefit
of a college or university owned or
operated by a governmental unit
described in section 170(b)(1)(A)(iv).
The organization should keep for its
records a list showing the name of and
amount contributed by each donor (other
than a governmental unit or publicly
supported organization) whose total gifts
during the years reported exceed 2% of
the amount reported on line 11, column (f).
An example of this list is given later.

nature and source of each amount
reported. Do not include gain or loss from
amounts reportable on line 12 or from the
sale of capital assets.
Line 12. Enter the total amount of gross
receipts the organization received from
related activities for all years reported in
Part II. The organization will not be treated
as meeting the section 170(b)(1)(A)(vi),
331 3% public support test or the 10% facts
and circumstances public support test, if
almost all of its support consists of gross
receipts from related activities and an
insignificant amount of its support comes
from governmental units and public
contributions. See Regulations section
1.170A-9(f)(7)(iii).
Include on line 12 gross receipts from
admissions, sales of merchandise,
performance of services, or furnishing of
facilities in any activity which is not an
unrelated trade or business (within the
meaning of section 513). See section
509(d)(2). Include membership fees to the
extent they are payments to purchase
admissions, merchandise, services, or the
use of facilities in a related activity. For
example, include on this line gross
receipts from:
A trade or business in which
substantially all work is performed by
volunteers (such as book fairs and sales
of gift wrap paper). See section 513(a)(1).
A trade or business carried on by the
organization primarily for the convenience
of its members, students, patients,
officers, or employees. See section
513(a)(2).
A trade or business which is the selling
of merchandise, substantially all of which
the organization received as gifts or
contributions. See section 513(a)(3).
“Qualified public entertainment
activities” or “qualified convention and
trade show activities” of certain
organizations. See section 513(d).
Furnishing certain hospital services.
See section 513(e).
A trade or business consisting of
conducting bingo games, but only if the
conduct of such games is lawful. See
section 513(f).
Qualified pole rentals by a mutual or
cooperative telephone or electric
company. See section 513(g).
The distribution of certain low cost
articles incidental to the solicitation of
charitable contributions (except to the
extent such gross receipts are properly
treated as charitable contributions
reportable on line 1 rather than as
proceeds of a sale or exchange), and
exchange and rental of members lists.
See section 513(h).

line 14 or 15 or check any of the boxes on
lines 16 through 18.
Example. An organization receives an
exemption letter from the IRS that it is
exempt from tax under section 501(c)(3)
and qualifies as a public charity under
section 170(b)(1)(A)(vi) effective on its
date of incorporation. When the
organization prepares Part II for each of its
first five tax years as a section 501(c)(3)
organization, it should check the box on
line 13 and should not complete the rest of
Part II. When the organization prepares
Part II for its sixth tax year and subsequent
years, it should not check the box on
line 13 and should complete the rest of
Part II.

DRAFT AS OF
August 14, 2014

Do not file this list with the
organization's Form 990 or
CAUTION
990-EZ because it may be made
available for public inspection.

!

Line 8. Include the gross income from
interest, dividends, payments with respect
to securities loans (section 512(a)(5)),
rents, royalties, and income from similar
sources. Do not include on this line
payments that result from activities of the
organization that further its exempt
purpose. Instead, report these amounts on
line 12.
Line 9. Enter the organization's net
income from conducting unrelated
business activities, whether or not the
activities are regularly conducted as a
trade or business. See sections 512 and
513 and the applicable regulations.
Include membership fees to the extent
they are payments to purchase
admissions, merchandise, services, or the
use of facilities in an activity that is an
unrelated business.
Net income and net losses from all of
the organization's unrelated business
activities should be aggregated. If a net
loss results, enter “-0-” on this line.
Line 10. Include all support as defined in
section 509(d) that is not included
elsewhere in Part II. Explain in Part VI the

Line 13. An organization that checks this
box should stop here and should not
complete the rest of Part II. It should not
make a public support computation on
-6-

An organization in its first five
years as a section 501(c)(3)
organization should make the
public support computations on a copy of
Schedule A that it keeps for itself. An
organization should carefully monitor its
public support on an ongoing basis to
ensure that it will meet a public support
test in the sixth year and succeeding
years.

TIP

Line 14. Round to the nearest hundredth
decimal point in reporting the percentage
of public support. For example, if the
organization calculates its public support
percentage as 58.3456%, this percentage
would be rounded to 58.35% when
reported on line 14.
Line 15. For 2014 enter the public
support percentage from the 2013
Schedule A (Form 990 or 990-EZ), Part II,
line 14. Round to the nearest hundredth
decimal point in reporting the percentage
of public support.
Line 16a. If the organization did not
check the box on line 13, and line 14 is
331 3% or more, check the box on this
line and do not complete the rest of
Part II. The organization qualifies as a
publicly supported organization for 2014
and 2015.
Line 16b. If the organization did not
check a box on line 13 or 16a, and line 15
is 331 3% or more, check the box on this
line and do not complete the rest of
Part II. The organization qualifies as a
publicly supported organization for 2014.
Line 17a. If the organization did not
check a box on line 13, 16a, or 16b, and
line 14 is 10% or more, and if the
organization meets the "facts and
circumstances" test, check the box on
this line and do not complete the rest
of Part II. The organization qualifies as a
publicly supported organization for 2014
and 2015.
If this box is checked, explain in Part IV
how the organization meets the "facts and
circumstances" test in Regulations section

Instructions for Schedule A (Form 990 or 990-EZ)

Line 5. Example—List of donors other than governmental units and publicly supported organizations
Assumption: 2% of the amount on Schedule A (Form 990 or 990-EZ), Part II, line 11, column (f) is $12,000
Contributors whose total gifts from 2010 through 2014 were in excess of the 2% limitation
Name

(a)

(b)

(c)

(d)

(e)

(f)

(g)

2010

2011

2012

2013

2014

Total

Excess
contributions
(col. (f) minus the
2% limitation)

DRAFT AS OF
August 14, 2014

XYZ Foundation
Banana Office
Supply

$59,000

$12,000

Plum Corporation
John Smith

$15,000

$5,000

Sue Adams

$5,000

$5,000

$10,000

Raisin Trade
Assoc.

Line 17b. If the organization did not
check a box on line 13, 16a, 16b, or 17a,
and line 15 is 10% or more, and if the
organization meets the "facts and
circumstances" test, check the box on
this line and do not complete the rest
of Part II. The organization qualifies as a
publicly supported organization for 2014. If
this box is checked, explain in Part VI how
the organization meets the "facts and
circumstances" test in Regulations section
1.170A-9(f)(3). Include the same
information identified in the instructions for
line 17a, earlier.

$18,000

$80,000

$68,000

$3,000

$1,000

$16,000

$4,000

$30,000

$18,000

$15,000

$1,000

$10,000

$20,000

Total. Add the items in column (g). Enter the total here and on Part II, column (f), line 5

1.170A-9(f)(3). Include the following
information.
Explain whether the organization
maintains a continuous and bona fide
program for solicitation of funds from the
general public, community, membership
group involved, governmental units, or
other public charities.
List all other facts and circumstances,
including the sources of support, whether
the organization has a governing body
which represents the broad interests of the
public, and whether the organization
generally provides facilities or services
directly for the benefit of the general public
on a continuing basis.
If the organization is a membership
organization, explain whether the
solicitation for dues-paying members is
designed to enroll a substantial number of
persons from the community, whether
dues for individual members have been
fixed at rates designed to make
membership available to a broad
cross-section of the interested public, and
whether the activities of the organization
will likely appeal to persons having some
broad common interest or purpose.

$3,000

$7,000

If Form 990 or 990-EZ is for the
organization's sixth tax year as a
section 501(c)(3) organization,
the organization should compute the
public support percentage on its Form 990
or 990-EZ for its first five tax years before
it checks the box on line 18. If its public
support percentage for its first five tax
years is 331 3% or more, or if it meets the
10% “facts and circumstances” test for its
first five tax years, it will qualify as a public
charity for its sixth tax year. If the
organization qualifies under the 10% test,
explain in Part VI.

TIP

If the organization does not
qualify as a publicly supported
organization under section
170(b)(1)(A)(vi), it can complete Part III to
determine if it qualifies as a publicly
supported organization under section
509(a)(2).

Line 18. If the organization did not check
a box on line 13, 16a, 16b, 17a, or 17b, it
Instructions for Schedule A (Form 990 or 990-EZ)

-7-

$16,000

$4,000

$30,000

$18,000

$27,000

$15,000

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

does not qualify as a publicly supported
organization under section
170(b)(1)(A)(iv) or 170(b)(1)(A)(vi) for the
2014 tax year and should check the box
on this line. If the organization does not
qualify as a public charity under any of the
boxes in Part I, lines 1 through 11, it is a
private foundation as of the beginning of
the 2014 tax year for filing purposes and
should not file Form 990, Form 990-EZ, or
Schedule A (Form 990 or 990-EZ) for the
2014 tax year. Instead, the organization
should file Form 990-PF and check Initial
return of a former public charity on Form
990-PF, at the top of page 1.

TIP

$10,000

$127,000

Part III. Support Schedule
for Organizations
Described in Section
509(a)(2)
If an organization checked the
box in Part I, for line 9, it should
complete Part III and insert the
appropriate dollar amounts. Do not leave
Part III blank or report only zeros if the
organization had any support during the
period. If the organization checks the box
in Part III, on line 14, it should stop there
and not complete the rest of Part III.

TIP

If the organization checked the
box in Part I, for line 9, and also
checks the box in Part III, for
line 20, the organization should complete
Part II to determine if it qualifies as a
publicly supported organization under
section 170(b)(1)(A)(vi). If it does qualify,
the organization should instead check the
box in Part I, for line 5, 7, or 8, whichever
applies.

TIP

Public Support Test. For an
organization to qualify as a publicly
supported organization under section
509(a)(2):
More than 331 3% of its support normally
must come from gifts, grants,
contributions, membership fees, and
gross receipts from admissions, sales of
merchandise, performance of services, or
furnishing of facilities in an activity which is
not an unrelated trade or business
under section 513; and
No more than 331 3% of its support
normally must come from gross
investment income and net unrelated
business income (less section 511 tax)
from businesses acquired by the
organization after June 30, 1975.

Public support is measured using a
5-year computation period that includes
the current and four prior tax years
(including short years). If the
organization's current tax year or any of its
four prior tax years were short years,
explain in Part VI.
In Part III, if the organization was not a
section 501(c)(3) organization for the
entire 5-year period, report amounts only
for the years the organization was a
section 501(c)(3) organization.

contributions, but not gross receipts from
exercising or performing the organization's
tax-exempt purpose or function, which
should be reported on line 2. Contributions
are sometimes difficult to distinguish from
such gross receipts—the label on the
agreement is not controlling. An amount
received from a governmental unit is
treated as gross receipts from exercising
or performing the organization's
tax-exempt purpose or function if the
purpose of the payment is primarily to
serve the direct and immediate needs of
the payor governmental unit. An amount is
treated as a contribution if the purpose of
the payment is primarily to provide a direct
benefit to the public. For example, if a
state government agency pays an
organization to operate an institute to train
agency employees in the principles of
management and administration, the
funds received should be included on
line 2 as gross receipts. See Regulations
section 1.509(a)-3(g). Refer to the
instructions for Form 990, Part VIII, lines
1e and 2, for more examples addressing
the distinction between government
payments that are contributions and
government payments that are gross
receipts from activities related to the
organization's tax-exempt purpose or
function. Medicare and Medicaid
payments are treated as gross receipts
from patients rather than as contributions
from the government payor for purposes
of the public support test. See Rev. Rul.
83-153, 1983-2 C.B. 48.

(if the cash accounting method is used) or
accrued each year (if the accrual
accounting method is used).
Do not include the names of the
grantors because Part VI will be
CAUTION
made available for public
inspection.

!

DRAFT AS OF
August 14, 2014

Line 1. Do not include any "unusual
grants." See Unusual grants, later. Include
membership fees only to the extent to
which the fees are payments to provide
support for the organization rather than to
purchase admissions, merchandise,
services, or the use of facilities. To the
extent that the membership fees are
payments to purchase admissions,
merchandise, services, or the use of
facilities in a related activity, include the
membership fees on line 2. See
Regulations section 1.509(a)-3(h). To the
extent that the membership fees are
payments to purchase admissions,
merchandise, services, or the use of
facilities in an activity that is not an
unrelated business under section 513,
report the membership fees on line 3. To
the extent that the membership fees are
payments to purchase admissions,
merchandise, services, or the use of
facilities in an activity that is an unrelated
business, report the net amount either on
line 10b or line 11, as appropriate.

Noncash contributions. Use any
reasonable method to determine the value
of noncash contributions reported on
line 1.
Do not report any donations of services
(such as the value of donated advertising
space or broadcast air time) or donations
of use of materials, equipment, or
facilities, on line 1 as gifts, grants, or
contributions. Donated services and
facilities from a governmental unit are
reported on line 5.
Loss on uncollectible pledge. If an
organization records a loss on an
uncollectible pledge that it reported on a
prior year's Schedule A, it should deduct
that loss from the contribution amount for
the year in which it originally counted that
contribution as revenue. For example, if in
the prior tax year the organization reported
a pledged contribution with a then-present
value of $50,000 in Part III, line 1, column
(e), but learned during the current tax year
that it would not receive any of that
pledged contribution, it should deduct the
$50,000 from the amount reported in Part
III, line 1, column (d), for the prior tax year.
Support from a governmental unit.
Include on line 1 support received from a
governmental unit. This includes

Unusual grants. Unusual grants
generally are substantial contributions
and bequests from disinterested persons
and are:
1. Attracted because of the
organization's publicly supported nature,
2. Unusual and unexpected because
of the amount, and
3. Large enough to endanger the
organization's status as normally meeting
the 331 3% public support test.
For a list of other factors to be
considered in determining whether a grant
is an unusual grant, see Regulations
section 1.509(a)-3(c)(4).
An unusual grant is excluded even if
the organization receives or accrues the
funds over a period of years.
Do not report gross investment income
items as unusual grants. Instead, include
all investment income on line 10a.
See Rev. Rul. 76-440, 1976-2 C.B. 58;
Regulations section 1.170A-9(f)(6)(ii); and
Regulations sections 1.509(a)-3(c)(3) and
1.509(a)-3(c)(4) for details about unusual
grants.
Include in Part VI a list showing the
amount, but not the grantor, of each
unusual grant actually received each year
-8-

Unusual grants recordkeeping. An
organization that received any unusual
grants during the 5-year period, should
also keep for its records a list showing, for
each year, the name of the contributor, the
date and amount of the grant, and a brief
description of the grant. If the organization
used the cash method for the applicable
year, show only amounts the organization
actually received during that year. If the
organization used the accrual method for
the applicable year, show only amounts
the organization accrued for that year. An
example of this list is given below.
Do not file this list with the
organization's Form 990 or
CAUTION
990-EZ because it may be made
available for public inspection.

!

Line 1. Example—List of unusual
grants
Year

▶ 2014

Description

▶

Name
Mr.
Distinguished Donor

Undeveloped land

▶

Date of Grant
January 15, 2014

Amount of Grant
$600,000

▶

Conservation easements and qualified
conservation contributions. The
organization must report any qualified
conservation contributions and
contributions of conservation easements
consistently with how it reports revenue
from such contributions in its books,
records, and financial statements and in
Form 990, Part VIII, Statement of
Revenue.
Reporting contributions not reported
as revenue. If the organization reports
any contributions on line 1 of Schedule A
(Form 990 or 990-EZ), Part III, that it does
not report on Form 990, as revenue in Part
VIII or as assets in Part X, or as revenue or
assets on Form 990-EZ, explain in Part VI
the basis for characterizing such transfers
as contributions but not as revenue or
assets. For example, if an organization is
a community foundation that receives and
holds a cash transfer for another
tax-exempt organization and reports
contributions of such property on
Schedule A (Form 990 or 990-EZ), Part III,
line 1, without reporting it on Form 990, as

Instructions for Schedule A (Form 990 or 990-EZ)

Line 7a. Example—List of amounts received from disqualified persons
Disqualified Person
David Smith

(a) 2010

(b) 2011

$7,000

$6,000

(c) 2012

(d) 2013

$5,000

$7,000

$5,000

$7,000

Anne Parker
Total

$7,000

$6,000

(e) 2014

(f) Total

$2,000

$15,000

$4,000

$16,000

$6,000

$31,000

DRAFT AS OF
August 14, 2014

Line 7b. Example—List of amounts received from other than disqualified persons
Year 2014
(a) Name

Word Processing, Inc.

(b) Amount received in
2014

(c) 1% of amount on
line 13 in 2014

(d) Enter the larger of
column (c) or $5,000

$25,000

$2,000

$5,000

Enter on Schedule A, column (e), line 7b

revenue in Part VIII or assets in Part X,
explain the basis for characterizing the
property as contributions but not as
revenue or assets.
Line 2. Include gross receipts from
admissions, merchandise sold, services
performed, or facilities furnished in any
activity that is related to the organization's
tax-exempt purpose (such as charitable,
educational, etc.).
To the extent that membership fees are
payments to purchase admissions,
merchandise, services, or the use of
facilities in a related activity, include the
membership fees on this line 2. See
Regulations section 1.509(a)-3(h).
Line 3. Include gross receipts from
activities that are not an unrelated trade or
business under section 513, such as:
A trade or business in which
substantially all work is performed by
volunteers (such as book fairs and sales
of gift wrap paper). See section 513(a)(1).
A trade or business carried on by the
organization primarily for the convenience
of its members, students, patients,
officers, or employees. See section
513(a)(2).
A trade or business which is the selling
of merchandise, substantially all of which
the organization received as gifts or
contributions. See section 513(a)(3).
“Qualified public entertainment
activities” or “qualified convention and
trade show activities” of certain
organizations. See section 513(d).
Furnishing certain hospital services.
See section 513(e).
A trade or business consisting of
conducting bingo games, but only if the
conduct of such games is lawful. See
section 513(f).
Qualified pole rentals by a mutual or
cooperative telephone or electric
company. See section 513(g).

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The distribution of certain low cost
articles incidental to the solicitation of
charitable contributions (except to the
extent such gross receipts are properly
treated as charitable contributions
reportable on line 1 rather than as
proceeds of a sale or exchange), and
exchange and rental of members lists.
See section 513(h).
While the activity of soliciting and
receiving qualified sponsorship payments
is also excluded from unrelated business
(see section 513(i)), the qualified
sponsorship payments themselves are
treated as charitable contributions
reportable on line 1.
Line 4. Enter tax revenue levied for the
organization's benefit by a governmental
unit and either paid to the organization or
expended on its behalf. Report this
amount whether or not the organization
includes this amount as revenue on its
financial statements or elsewhere on
Form 990 or 990-EZ.
Line 5. Enter the value of services or
facilities furnished by a governmental unit
to the organization without charge. Do not
include the value of services or facilities
generally furnished to the public without
charge. For example, include the fair
rental value of office space furnished by a
governmental unit to the organization
without charge, but only if the
governmental unit does not generally
furnish similar office space to the public
without charge. Report these amounts
whether or not the organization includes
these amounts as revenue on its financial
statements or elsewhere on Form 990 or
990-EZ.
Line 7a. Enter the amounts that are
included on lines 1, 2, and 3 that the
organization received from disqualified
persons. See the definition of disqualified

Instructions for Schedule A (Form 990 or 990-EZ)

-9-

(e) 2014 excess
(column (b) minus
column (d))
$20,000

$20,000

person in the Glossary of the Instructions
for Form 990.
For amounts included on lines 1, 2, and
3 that were received from a disqualified
person, the organization should keep for
its records a list showing the name of, and
total amounts received in each year from,
each disqualified person. Enter the total of
such amounts for each year on line 7a.
See an example of this list above.
Do not file this list with the
organization's Form 990 or
CAUTION
990-EZ because it may be made
available for public inspection.

!

Line 7b. For any gross receipts included
on lines 2 and 3 from related activities
received from a person or from a bureau
or similar agency of a governmental unit,
other than from a disqualified person,
that exceed the greater of $5,000 or 1% of
the amount on line 13 for the applicable
year, enter the excess on line 7b. The
organization should keep for its records a
list showing, for each year, the name of
the person or government agency, the
amount received during the applicable
year, the larger of $5,000 or 1% of the
amount on line 13 for the applicable year,
and the excess, if any. See an example of
this list above.
Do not file this list with the
organization's Form 990 or
CAUTION
990-EZ because it may be made
available for public inspection.

!

Line 10a. Include the gross income from
interest, dividends, payments received on
securities loans (section 512(a)(5)), rents,
royalties, and income from similar
sources. Do not include on this line
payments that result from activities of the
organization that further its exempt
purpose. Instead, report these amounts on
line 2.

Line 10b. Enter the excess of the
organization's unrelated business
taxable income (as defined in section
512) from trades or businesses that it
acquired or commenced after June 30,
1975, over the amount of tax imposed on
this income under section 511. Include
membership fees to the extent they are
payments to purchase admissions,
merchandise, services, or the use of
facilities in an unrelated business activity
that is a trade or business that was
acquired or commenced after June 30,
1975.
Net income and net losses from all of
these trades or businesses should be
aggregated. If a net loss results, enter
“-0-” on this line. See Regulations section
1.509(a)-3(a)(3).

An organization in its first five
years as a section 501(c)(3)
organization should make the
public support and investment income
computations on a copy of Schedule A
(Form 990 or 990-EZ) that it keeps for
itself. An organization should carefully
monitor its public support on an ongoing
basis to ensure that it will meet the public
support tests in the sixth year and
succeeding years.

TIP

If Form 990 or 990-EZ is for the
organization's sixth tax year as a
section 501(c)(3) organization,
and it checked the box on line 20, it should
compute the public support percentage
and the investment income percentage on
its Form 990 for its first five tax years. If its
public support percentage for its first five
tax years is more than 331 3% and the
investment income percentage for its first
five tax years is not more than 331 3%, it will
qualify as a public charity for its sixth tax
year. If the organization qualifies in this
manner, explain in Part VI.

TIP

DRAFT AS OF
August 14, 2014

Line 11. Enter the organization's net
income from conducting unrelated
business activities not included on
line 10b, whether or not the activities are
regularly conducted as a trade or
business. Do not include net income from
conducting trades or businesses acquired
or commenced by the organization prior to
July 1, 1975. See sections 512, 513, and
514, and the applicable regulations.
Include membership fees to the extent
they are payments to purchase
admissions, merchandise, services, or the
use of facilities in an activity that is an
unrelated business not included on
line 10b.
Net income and net losses from all of
the organization's unrelated business
activities should be aggregated. If a net
loss results, enter “-0-” on this line.
Line 12. Include all support as defined in
section 509(d) that is not included
elsewhere in Part III. Explain in Part VI the
nature and source of each amount
reported. Do not include gain or loss from
sale of capital assets.

Line 14. An organization that checks this
box should stop here and should not
complete the rest of Part III. It should not
make a public support computation on
line 15 or 16 or an investment income
computation on line 17 or 18, or check any
of the boxes for line 19 or 20.
Example. An organization receives an
exemption letter from the IRS that it is
exempt from tax under section 501(c)(3)
and qualifies as a public charity under
section 509(a)(2) effective on its date of
incorporation. When the organization
prepares Part III for its first five tax years, it
should check the box on line 14 and
should not complete the rest of Part III.
When the organization prepares Part III for
its sixth tax year and subsequent years, it
should not check the box on line 14 and
should complete the rest of Part III.

Line 15. Round to the nearest hundredth
decimal point in reporting the percentage
of public support. For example, if the
organization calculates its public support
percentage as 58.3456%, this percentage
would be rounded to 58.35% when
reported on line 15.

Line 16. For 2014, enter the public
support percentage from the 2013
Schedule A (Form 990 or 990-EZ), Part III,
line 15. Round to the nearest hundredth
decimal point in reporting the percentage
of public support.
Line 17. Round to the nearest whole
percentage.
Line 18. For 2014, enter the investment
income percentage from the 2013
Schedule A (Form 990 or 990-EZ), Part III,
line 17. Round to the nearest whole
percentage.
Line 19a. If the organization did not
check the box on line 14, line 15 is more
than 331 3%, and line 17 is not more than
331 3%, check the box on this line and
do not complete the rest of this
schedule. The organization qualifies as a
publicly supported organization for 2014
and 2015.
Line 19b. If the organization did not
check the box on line 14 or 19a, line 16 is
more than 331 3%, and line 18 is not more
than 331 3%, check the box on this line
and do not complete the rest of this
schedule. The organization qualifies as a
publicly supported organization for 2014.
Line 20. If the organization did not check
the box on line 14, 19a, or 19b, it does not
qualify as a publicly supported
organization under section 509(a)(2) for
the 2014 tax year and should check the
box on this line. If the organization does
not qualify as a public charity under any of
the boxes on Schedule A (Form 990 or
990-EZ), Part I, lines 1 through 11, it is a
private foundation for filing purposes as of
the beginning of the tax year and should
not file Form 990, Form 990-EZ, or
Schedule A (Form 990 or 990-EZ) for the
2014 tax year. Instead, the organization
should file Form 990-PF, and check Initial
return of a former public charity on Form
990-PF, at the top of page 1.

-10-

If the organization does not
qualify as a publicly supported
organization under section
509(a)(2), it can complete Part II to
determine if the organization qualifies as a
publicly supported organization under
section 170(b)(1)(A)(vi).

TIP

Part IV. Supporting
Organizations

Complete the Sections of Part IV that
correspond below with the type of
supporting organization indicated on
line 11a, 11b, 11c, or 11d:
Type I: Sections A and B;
Type II: Sections A and C;
Type III Functionally Integrated:
Sections A, D, and E; and
Type III Non-Functionally Integrated:
Sections A and D, and Part V.

Section A. All Supporting
Organizations
Line 1. The organization’s articles of
incorporation or trust instrument must
designate the publicly supported
organization(s) on whose behalf the
supporting organization is operated. The
articles of a Type I or II supporting
organization may designate its supported
organization(s) either by class or purpose
or by name. The articles of a Type III
supporting organization must designate
the supported organization(s) by name,
unless a historic and continuing
relationship exists between the
organizations.
Check “Yes” only if the organization
supports no organization other than those
listed by name in its governing instrument.
If the organization supports any
organization not specifically listed, check
“No” and describe in Part VI how the
supported organizations are designated. If
designated by class or purpose, describe
the class or purpose. If the organization
and its supported organization(s) have a
historic and continuing relationship,
explain that relationship. If support of one
or more organizations is subject to certain
future contingencies, explain those
contingencies, and explain what

Instructions for Schedule A (Form 990 or 990-EZ)

organizations will be supported or
benefited if those contingencies occur.
Line 2. If the organization supported any
domestic or foreign organization (other
than an organization described in section
501(c)(4), (5), or (6)) that did not have an
IRS determination of status under section
509(a)(1) or (2), check “Yes” and explain
in Part VI how the organization determined
that the supported organization was
described in section 509(a)(1) or (2).

generally must exercise control and
discretion over funds granted to a foreign
organization. See Rev. Rul. 63-252,
1963-2 C.B. 101, and Rev. Rul. 66-79,
1966-1 C.B. 48.
Explain in Part VI how the organization
retained such control and discretion
despite being controlled or supervised by
or in connection with such foreign
supported organization(s). Also explain
what controls the organization used to
ensure that all support to the foreign
supported organization(s) was used
exclusively for charitable, educational, etc.
purposes described in section
170(c)(2)(B) if the foreign supported
organization does not have an IRS
determination under sections 501(c)(3)
and 509(a)(1) or (2).

organization made any grants or provided
any benefits to any other organization or
individual, check “Yes” and provide detail
in Part VI.
Lines 7 and 8. Under section 4958(c)(3),
any grant, loan, compensation, or other
similar payment provided by a supporting
organization to a substantial contributor
(defined in section 4958(c)(3)(C)), to a
family member (defined in section
4958(f)(4)), and to a 35% controlled
entity of such persons, is considered a
per se excess benefit in its entirety,
regardless of the fairness or
reasonableness of the payment, and is
subject to tax under section 4958(a). The
same is true of any loan by a supporting
organization to a disqualified person
under section 4958 (other than loans to
certain exempt organizations). If the
organization made any such payment or
loan during the tax year, check “Yes” and
report the transaction on Schedule L
(Form 990 or 990-EZ), Transactions With
Interested Persons, Part I. For more
information on excess benefit transactions
generally, see the Instructions for
Schedule L.

DRAFT AS OF
August 14, 2014

Line 3a. A supporting organization may
support an organization described in
section 501(c)(4), (5), or (6), if the
supported organization satisfies the public
support tests applicable to a section
509(a)(2) organization. See Regulations
section 1.509(a)-4(k) and the instructions
for Part III. If the organization supports a
section 501(c)(4), (5), or (6) organization,
check “Yes” for line 3a.

Line 3b. If the organization confirmed that
the supported organization qualified under
section 501(c)(4), (5), or (6) and met the
section 509(a)(2) public support tests for
its most recent tax year, check “Yes” and
describe in Part VI how the organization
made this determination. For example, the
organization may ask its section 501(c)(4),
(5), or (6) supported organization to
furnish a copy of its IRS determination
letter and to complete annually a pro
forma Schedule A, Part III, and keep the
letter and support calculation in the
supporting organization’s files.
If the supporting organization does not
annually confirm that its supported
organization satisfies the section 509(a)(1)
public support tests, it must explain in Part
VI how it knows that the supported
organization would have been described
in sections 509(a)(1) or 509(a)(2) if it were
described in section 501(c)(3) during the
tax year.
Line 3c. Support given to a supported
section 501(c)(4), (5), or (6) organization
must be used solely for charitable
purposes. If the supporting organization
has put into place measures to ensure that
such support is used solely for charitable
purposes, check “Yes” and describe those
measures in Part VI. If not, check “No” and
describe in Part VI how the supporting
organization ensured during the tax year
that its assets were used solely for
charitable purposes.
Line 4a. A supporting organization
cannot qualify for Type III status in the tax
year if any supported organization was not
organized in the United States.
Lines 4b and 4c. A supporting
organization must exercise control and
discretion over funds granted to an
organization that is not exempt under
section 501(c)(3). See Rev. Rul. 68-489,
1968-2 C.B. 210. Also, a domestic charity

Line 5. Supporting organizations may
add, substitute, or remove supported
organizations only in certain limited
situations. See Regulations section
1.509(a)-4(d). Generally, a Type I or Type
II supporting organization may add or
substitute particular supported
organizations within the class or classes
designated in its articles, but may not add
or substitute supported organizations
outside of the designated class(es). A
Type III supporting organization, which
must specify its supported organizations
by name, may only substitute supported
organizations if such substitution is
conditioned upon the occurrence of an
event which is beyond the control of the
supporting organization (such as a
supported organization’s lapse into private
foundation status).
If the organization has added,
substituted, or removed any supported
organization during the tax year, check
“Yes” and provide detail in Part VI,
including (i) the names and EINs of the
organizations added, substituted, or
removed; (ii) the reasons for each
addition, substitution, or removal; (iii) the
authority under the organization’s
organizing document for each addition,
substitution, or removal; and (iv) an
explanation of how the action was
accomplished (such as by amendment to
the organizing document substituting a
new supported organization).
Line 6. A supporting organization must
engage solely in activities that support or
benefit its supported organization(s). In
addition to making grants and providing
services and facilities directly to its
supported organization(s), a supporting
organization generally may also make
grants or provide services or facilities to
(1) individual members of the charitable
class benefited by its supported
organization(s) or (2) other supporting
organizations that also support or benefit
its supported organization(s). See
Regulations section 1.509(a)-4(e). If the

Instructions for Schedule A (Form 990 or 990-EZ)

-11-

Line 9. A supporting organization may
not be controlled by disqualified
persons, as defined in section 4946.
Section 509(a)(1) or (2) organizations, and
foundation managers who are disqualified
persons only as a result of being
foundation managers, are not treated as
disqualified persons for this purpose.
Impermissible control may be direct or
indirect. If a disqualified person holds any
of the interests described in lines 9b or 9c,
or derives personal benefit from any such
assets, provide detail in Part VI.
Line 10. Section 509(f)(2) prohibits Type
I and Type III supporting organizations
from accepting a gift or contribution from
certain persons associated with a
supported organization of such supporting
organization. Specifically, if a Type I or
Type III supporting organization accepts a
contribution after August 16, 2006, from a
person who controls the governing body of
a supported organization (or from a family
member of such person, or from a 35%
controlled entity of such persons), then
the supporting organization loses its
status as a supporting organization. Such
supporting organization must file Form
990-PF unless it qualifies as a public
charity under section 509(a)(1) or (2).
Line 11. Under section 4943(f), a Type II
supporting organization that accepts a
contribution from a person who controls
the governing body of a supported
organization (or from a family member of
such person, or from a 35% controlled
entity of such person) is subject to the
excess business holdings tax under
section 4943. All Type III non-functionally
integrated supporting organizations

generally are also subject to the tax. For
more information about excess business
holdings, see the Instructions for Form
4720, Return of Certain Excise Taxes
Under Chapters 41 and 42 of the Internal
Revenue Code.

relationship. If the organization relies on
other than overlap of at least a majority of
directors or trustees of all organizations
involved, check “No” and describe in Part
VI how the necessary relationship is
established.

Section B. Type I Supporting
Organizations

Section D. All Type III
Supporting Organizations

Line 1. A Type I supporting organization
must be operated, supervised, or
controlled by one or more of its supported
organizations (the “controlling supported
organizations”). This means that the
controlling supported organizations must
have a substantial degree of direction over
the policies, programs, and activities of
the supporting organization, and the
supporting organization in turn must be
responsive to the needs or demands of
the controlling supported organizations,
and must constitute an integral part of, or
maintain a significant involvement in, the
operations of the controlling supported
organizations. This relationship is most
clearly established when one or more
supported organizations (through their
officers, directors, trustees, or
membership) have the unconditional
power to remove and replace at least a
majority of the supporting organization’s
directors or trustees at any time. The
relationship is also commonly established
when one or more supported
organizations have the power to appoint or
elect at least a majority of the supporting
organization’s directors or trustees at
regular intervals. However, there may be
other ways to establish this relationship. If
the organization relies on other ways to
establish the relationship, check “No” and
describe in Part VI how the necessary
relationship is established.

Line 1. A Type III supporting organization
must supply annually a written notice,
addressed to a principal officer of each
supported organization, which includes
the following:
1. A description of the type and
amount of all support the supporting
organization provided to the supported
organization during the supporting
organization’s tax year preceding the tax
year in which notice is provided.
2. A copy of the supporting
organization’s most recently filed Form
990 (the supporting organization may
redact the names and addresses of
contributors).
3. A copy of the supporting
organization’s updated governing
documents (including articles of
organization, bylaws, and any
amendments), to the extent not previously
provided.

c. The officers, directors, or trustees of
the supporting organization and of the
supported organization maintain a
close and continuous working
relationship; and
2. Because of this relationship, the
supported organization has a significant
voice in the supporting organization’s
investment policies, timing of grants,
manner of making grants, selection of
grant recipients, and other use of income
or assets (the “significant voice” test).

DRAFT AS OF
August 14, 2014

Line 2. The supporting organization may
benefit organizations that do not
participate in the control relationship
described in line 1, but only if such activity
carries out the purposes of the controlling
supported organizations.

Section C. Type II Supporting
Organizations
Line 1. A Type II supporting organization
must be supervised or controlled in
connection with its supported
organization(s). This means that there
must be common supervision or control by
the persons supervising or controlling both
the supporting organization and the
supported organization(s) to ensure that
the supporting organization will be
responsive to the needs and requirements
of the supported organization(s). This
relationship is most clearly established
when the same persons serve as all or a
majority of the directors or trustees of all of
the organizations involved. However,
there may be other ways to establish this

See Regulations section 1.509(a)-4(i)(2).
The notice must be submitted by the last
day of the fifth month after the end of the
tax year (May 31 for calendar-year filers).
An organization that does not timely
submit the required information in the
required manner does not qualify as a
Type III supporting organization for the tax
year in which it fails to timely submit. See,
however, Regulations section 301.9100-3
with respect to late elections.
State whether during the tax year being
reported the organization provided a
timely notice with the required information
in the required manner.
Lines 2 and 3. A Type III supporting
organization must be responsive to the
needs or demands of at least one
supported organization. An organization
meets this responsiveness test with
regard to a particular supported
organization if:
1. The supported organization has an
adequate relationship with the supporting
organization because:
a. The supported organization
regularly appoints or elects (whether
or not during the tax year) at least one
officer, director, or trustee of the
supporting organization;
b. At least one member of the
governing body of the supported
organization also serves as an officer,
director, or trustee of the supporting
organization; or
-12-

In the case of a supporting organization
that supported a supported organization
before November 20, 1970, additional
facts and circumstances such as a historic
and continuing relationship between the
organizations may also be taken into
account in considering the
responsiveness test.
If the organization had an adequate
relationship with at least one supported
organization only by means of a “close
and continuous working relationship” or a
“historic and continuing relationship,” then
in Part VI explain the relationship and how
it was maintained. Also, all Type III
supporting organizations that claim to
meet the significant voice test must
describe in Part VI the voice or role of the
supported organization(s) in directing the
supporting organization’s use of its
income or assets.

Section E. Type III Functionally
Integrated Supporting
Organization
Line 1. A Type III supporting organization
must constitute an integral part of one or
more of its supported organizations by
maintaining significant involvement in its
operations and providing support on which
the supported organization is dependent.
To satisfy this requirement as a Type III
functionally integrated supporting
organization, an organization may (a) pass
an Activities Test (see instructions for
Line 2, later), (b) be the parent of its
supported organizations (see instructions
for Line 3, later), or (c) support one or
more governmental entities (see Support
of governmental entity, later). If the
organization cannot satisfy any of these
tests, it may still qualify as a Type III
non-functionally integrated supporting
organization (see Part V, later).
Support of governmental entity. A
Type III supporting organization meets the
integral part test for a functionally
integrated supporting organization if it (1)
supports at least one supported
organization that is a governmental entity
to which the supporting organization is
responsive (as discussed in instructions
for Lines 2 and 3, earlier) and (2) engages
in activities for or on behalf of such
governmental supported organization that

Instructions for Schedule A (Form 990 or 990-EZ)

performs the functions or carries out the
purposes of such governmental supported
organization and that, but for the
involvement of the supporting
organization, would normally be engaged
in by the governmental supported
organization itself. See Notice 2014-4. A
Type III supporting organization that
claims to meet the integral part test for a
functionally integrated supporting
organization by supporting a
governmental entity must describe in Part
VI how it met these requirements for the
tax year.

Part V. Type III
Non-Functionally
Integrated 509(a)(3)
Supporting Organizations

A Type III supporting organization (other
than a Type III functionally integrated
supporting organization) generally must
satisfy a distribution requirement
described in Regulations section
1.509(a)-4(i)(5)(ii) along with an
attentiveness requirement described in
Regulations section 1.509(a)-4(i)(5)(iii) to
meet the integral part test for a Type III
relationship. To satisfy the distribution
requirement, the organization must make
a minimum amount (distributable amount)
of distributions to or for the use of one or
more supported organizations. Carryovers
of excess distributions from certain prior
years may be used for this purpose.

organization anticipates being required to
complete Part V next year.
Definition. Adjusted net income is gross
income for the tax year less deductions
allowable to a corporation subject to tax
under section 11, with certain
modifications discussed in the line
instructions later. In computing gross
income and deductions, the principles of
the income tax provisions of the Code
apply (except to the extent inconsistent
with section 4942 or the underlying
regulations), but exclusions, deductions,
and credits are not allowed unless
expressly provided for under section 4942
or the underlying regulations. See
Regulations section 53.4942(a)-2(d)(1).

DRAFT AS OF
August 14, 2014

Line 2. Activities Test. To meet the
activities test of a Type III functionally
integrated supporting organization,
substantially all of the supporting
organization’s activities must (1) directly
further the exempt purposes of the
supported organization(s) to which the
supporting organization was responsive,
and (2) be activities that such supported
organization(s) would normally be
engaged in but for the supporting
organization’s involvement.

Direct furtherance. Substantially all
of the supporting organization’s activities
must be “direct furtherance” activities.
Direct furtherance activities are conducted
by the supporting organization itself, rather
than by a supported organization. Holding
title to exempt-use assets and managing
them are direct furtherance activities.
Fundraising, investing and managing
non-exempt-use assets, grant-making to
organizations, and grant-making to
individuals (unless it meets the
requirements of Regulations section
1.509(a)-4(i)(4)(ii)(D)) are not direct
furtherance activities.
But for. In addition, the direct
furtherance activities must be activities in
which, but for the supporting
organization’s involvement, the supported
organization would normally be involved.
Examples include holding and
managing facilities used by a church for its
religious purposes, operating a food
pantry for a group of churches that
normally would operate food pantries
themselves, and maintaining local parks
for a community foundation that otherwise
would maintain those parks. See
Regulations section 1.509(a)-4(i)(4)(v) for
more detailed examples.
Line 3. Parent of Supported Organizations. To qualify as the parent of all the
supported organizations, a supporting
organization must (1) have the power to
appoint or elect, directly or indirectly, a
majority of the officers, directors, or
trustees of every supported organization;
and (2) exercise a substantial degree of
direction over the policies, programs, and
activities of every supported organization.

Sections A through E of Part V show
whether the organization has satisfied its
distribution and attentiveness
requirements for its tax year. Sections A
and B determine the organization’s
adjusted net income and minimum asset
amount, which amounts are used in
determining the distributable amount in
Section C. Section D determines the
organization’s distributions that count
toward the distributable amount and
determines whether the attentiveness
requirement is met. Section E determines
whether the distributable amount is
satisfied through current distributions and
prior-year carryovers, and determines
carryovers to future years.
A trust is excepted from the general
distribution and attentiveness
requirements (and need not complete
Sections A through E) if on November 20,
1970, it met and continues to meet the
requirements set forth in Regulations
section 1.509(a)-4(i)(9). A trust that claims
this status by checking the box on line 1 at
the beginning of Part V must explain in
Part VI how it meets each of the
requirements. A trust that has obtained a
ruling from the IRS on this issue must so
indicate in Part VI.

Section A. Adjusted Net Income
The principles of section 4942(f) and
Regulations section 53.4942(a)-2(d) apply
in determining adjusted net income. See
Regulations section
1.509(a)-4T(i)(5)(ii)(B).

Prior and current year columns. The
organization’s adjusted net income for the
prior tax year is used in determining the
organization’s distributable amount for the
current tax year. The form also allows for
reporting the organization’s adjusted net
income for the current tax year for use in
next year’s calculations; this reporting is
optional but may be helpful if the

Instructions for Schedule A (Form 990 or 990-EZ)

-13-

Line 1. Report the organization’s net
short-term capital gain, if any. Long-term
capital gains and losses from the sale or
disposition of property are not taken into
account in determining adjusted net
income (unless reportable on line 2 as
recoveries of prior-year distributions). Net
short-term capital loss cannot be carried
back or forward to other tax years.
Amounts treated as long-term capital
gains include capital gain dividends from a
regulated investment company and net
section 1231 gains (but net section 1231
losses are treated as ordinary losses and
thus taken into account). If the fair market
value of property distributed for charitable
purposes exceeds adjusted basis, the
excess is not deemed includible in
income.
Adjusted basis. The adjusted basis for
purposes of determining gain from the
sale or other disposition of property is the
greater of:
1. The fair market value of such
property on August 17, 2006, plus or
minus all adjustments thereafter and
before the date of disposition under
sections 1011–1023, if the property was
held continuously from August 17, 2006,
to the date of disposition.
2. The adjusted basis under sections
1011–1023, without regard to section
362(c). If assets acquired before August
17, 2006, were subject to depreciation or
depletion, to determine the adjustments to
basis between the date of acquisition and
August 17, 2006, straight line depreciation
or cost depletion must be taken into
account. Any other adjustments that would
have been made during such period (such
as a change in useful life based upon
additional data or a change in facts) must
also be taken into account.
The adjusted basis for purposes of
determining loss is only the amount
described in item 2 above.
Line 2. Recoveries of prior-year
distributions include the following:

Repayments received of amounts
which were taken into account as a
distribution counting toward the
distribution requirement in a prior tax year.
Proceeds from the sale or disposition of
property to the extent that acquisition of
such property was taken into account as a
distribution counting toward the
distribution requirement in a prior tax year.
An amount set aside and taken into
account as a distribution counting toward
the distribution requirement in a prior tax
year to the extent it is determined that
such amount is not necessary for the
purposes for which it was set aside.

Net losses from a related business or
other charitable activity that produces
gross income (no deduction in excess of
the income from such activity).
Charitable contributions under sections
170 or 642.
Net operating loss carrybacks and
carryovers under section 172.
Dividends under section 241 and the
sections following it (the
dividends-received deductions for
corporations).
Net capital losses (short-term or
long-term).
Expenses and interest relating to
tax-exempt income under section 265 are
deductible.

less than 95% of its total use is for
charitable purposes, a reasonable
allocation must be made between
charitable and non-charitable use.
Excluded property. Certain assets (in
addition to exempt-use assets) are
excluded entirely from the computation of
the minimum asset amount. These include
charitable pledges and interests in an
estate or trust (created and funded by
another person) prior to distribution to the
supporting organization.

DRAFT AS OF
August 14, 2014

Line 3. Report all other gross income.
Gross income includes all amounts
derived from, or in connection with,
property held by the organization (except
as specified otherwise in the instructions
for Line 1). Include income from any
related or unrelated trade or business.
Include income from tax-exempt bonds.
Do not include the following:
Gifts, grants, or contributions received.
Long-term capital gains or losses or net
short-term capital losses.
Income received from an estate, unless
the estate is considered terminated due to
a prolonged period of administration.
Distributions from a trust created and
funded by another person.
Certain amounts received by an
organization in the redemption of stock in
a corporate disqualified person in order to
avoid excess business holdings, which
are treated as not essentially equivalent to
a dividend under section 302(b)(1) (and
thus as amounts received in exchange for
the stock, giving rise to long-term capital
gain or loss) if the conditions of
Regulations section 53.4942(a)-2(d)(2)(iv)
are met.
Line 5. The deduction for depreciation
under section 167 is allowed, but only on
the basis of the straight-line method. The
deduction for depletion under section 611
is allowed, but without regard to section
613 (percentage depletion).

Lines 6 and 7. No deduction is allowed
except ordinary and necessary expenses
paid or incurred for the production or
collection of gross income, or for the
management, conservation, or
maintenance of property held for the
production of income. Such expenses
may include operating expenses such as
compensation of officers and employees,
interest, rent, and taxes. Where only a
portion of property produces income (or is
held for the production of income) and the
remainder is used for charitable purposes,
the expenses must be apportioned
between exempt and non-exempt use on
a reasonable basis.
Do not deduct the following:

Section B. Minimum Asset
Amount

The rules for determining the supporting
organization’s minimum asset amount are
set forth in Regulations sections
1.509(a)-4T(i)(5)(ii)(C) and
1.509(a)-4T(i)(8), using valuation methods
described in Regulations section
53.4942(a)-2(c).

Prior and current year columns. The
organization’s minimum asset amount for
the prior tax year is used in determining
the organization’s distributable amount for
the current tax year. The form also allows
for reporting the organization’s minimum
asset amount for the current tax year for
use in next year’s calculations; this
reporting is optional but may be helpful if
the organization anticipates being required
to complete Part V next year.
Definition. In figuring the minimum asset
amount, include only assets of the
supporting organization that are not used
or held for use by the supporting
organization (or by a supported
organization, if the supporting organization
provides the asset free of charge or at
nominal rent) to carry out the exempt
purposes of the supported organization(s).
Assets held for the production of income
or for investment are not considered to be
used directly for charitable functions even
though the income from the assets is used
for charitable functions. It is a factual
question whether an asset is held for the
production of income or for investment
rather than used or held for use directly by
the supporting organization or a supported
organization for charitable purposes. For
example, an office building used to
provide offices for employees engaged in
managing endowment funds for the
supporting organization or supported
organization is not considered an asset
used for charitable purposes.
Dual-use property. When property is
used for both charitable and other
purposes, the property is considered used
entirely for charitable purposes if 95% or
more of its total use is for that purpose. If
-14-

Line 1a. Report on line 1a the average
monthly fair market value of securities
(such as common and preferred stock,
bonds, and mutual fund shares) for which
market quotations are readily available. A
supporting organization may use any
reasonable method to make this
determination if consistently used. For
example, a value for a particular month
might be determined by the closing price
on the first or last trading day of the month
or an average of the closing prices on the
first and last trading days of the month.
Market quotations are considered readily
available if a security is any of the
following:
Listed on the New York or American
Stock Exchange or any city or regional
exchange in which quotations appear on a
daily basis, including foreign securities
listed on a recognized foreign national or
regional exchange,
Regularly traded in the national or
regional over-the-counter market for which
published quotations are available, or
Locally traded, for which quotations can
be readily obtained from established
brokerage firms.
If securities are held in trust for, or on
behalf of, a supporting organization by a
bank or other financial institution that
values those securities periodically using
a computer pricing system, the
organization may use that system to
determine the value of the securities. The
system must be acceptable to the IRS for
federal estate tax purposes.
Line 1b. Compute cash balances on a
monthly basis by averaging the amount of
cash on hand on the first and last days of
each month. Include all cash balances
and amounts, even if they may be used for
charitable purposes (see instructions for
Line 4, later) or set aside and taken as a
distribution (see instructions for Line 5,
Section D, later).
Line 1c. The fair market value of assets
other than securities for which market
quotations are readily available is
determined annually except as described
later. The valuation may be made by
supporting organization employees or by
any other person even if that person is a
disqualified person. If the IRS accepts the
valuation, it is valid only for the tax year for

Instructions for Schedule A (Form 990 or 990-EZ)

which it is made. A new valuation is
required for the next tax year.
Valuation date. An asset required to be
valued annually may be valued as of any
day in the supporting organization's tax
year, provided the organization values the
asset as of that date in all tax years.
However, a valuation of real estate
determined on a 5-year basis by a
certified, independent appraisal
(discussed later) may be made as of any
day in the first tax year of the organization
to which the valuation applies.

Line 1e. If the fair market value of any
securities, real estate holdings, or other
assets reported on lines 1a and 1c reflects
a blockage discount, marketability
discount, or other reduction from full fair
market value because of the size of the
asset holding or any other factor, enter on
line 1e the aggregate amount of the
discounts claimed. Provide an explanation
in Part VI that includes the following
information for each asset or group of
assets involved:
1. A description of the asset or asset
group (for example, 20,000 shares of XYZ,
Inc., common stock),
2. For securities, the percentage of
the total issued and outstanding securities
of the same class that is represented by
the organization's holding,
3. The fair market value of the asset
or asset group before any claimed
blockage discount or other reduction,
4. The amount of the discount
claimed, and
5. An explanation of the reason for the
discount.

enter the larger amount instead (prorated
in the case of a short tax year). If the
organization uses a larger amount, explain
why in Part VI.
Line 7. Enter the amount of recoveries (if
any) reportable in Section A, line 2.

Section C. Distributable
Amount

DRAFT AS OF
August 14, 2014

Proration of value of assets held for
part of year or in a short tax year. The
value of an asset held less than a full tax
year is prorated by multiplying the value of
the asset by a fraction, of which the
numerator is the number of days the
organization held the asset during its tax
year, and the denominator is 365 (366 if
the tax year includes February 29). If the
supporting organization has a short tax
year, the value of all assets is accordingly
prorated.

5-year valuation for real estate. A
written, certified, and independent
appraisal of the fair market value of any
real estate, including any improvements,
may be determined on a 5-year basis by a
qualified person. The qualified person may
not be a disqualified person with respect
to the supporting organization or an
employee of the supporting organization.
Commonly accepted valuation
methods must be used in making the real
estate appraisal. A valuation based on
acceptable methods of valuing property
for federal estate tax purposes will be
considered acceptable.
The real estate appraisal must include
a closing statement that, in the appraiser's
opinion, the appraised assets were valued
according to valuation principles regularly
employed in making appraisals of such
property, using all reasonable valuation
methods. The supporting organization
must keep a copy of the independent
appraisal for its records. If a valuation is
reasonable, the organization may use it for
the tax year for which the valuation is
made and for each of the four following tax
years.
Any valuation of real estate by a
certified independent appraisal may be
replaced during the 5-year period by a
subsequent 5-year certified independent
appraisal or by an annual valuation as
described earlier. The most recent
valuation should be used to compute the
organization's minimum asset amount.
If the valuation is made according to
the above rules, the IRS will continue to
accept it during the 5-year period for which
it applies even if the actual fair market
value of the real estate changes during the
period.

In the case of securities, there are
certain limitations on the size of the
reduction in value that can be claimed.
The organization may reduce the fair
market value of securities only to the
extent that it can establish that the
securities could only be liquidated in a
reasonable period of time at a price less
than the fair market value because:
The securities are such a large block
that liquidation would depress the market,
The securities are in a closely held
corporation, or
The sale would result in a forced or
distress sale.
Any reduction in value of securities may
not exceed 10% of the fair market value
(determined without regard to any
reduction in value).
Line 2. Enter the total acquisition
indebtedness that applies to assets
included on line 1 (prorated in the case of
assets held for a portion of the year or in a
short tax year). For details on acquisition
indebtedness, see section 514(c)(1).
Line 4. Supporting organizations may
exclude from the minimum asset amount
the reasonable cash balances necessary
to cover current administrative expenses
and other normal and current
disbursements directly connected with the
charitable, educational, or other similar
activities. The amount of cash that may be
excluded is generally 1.5% of the fair
market value of all assets (minus any
acquisition indebtedness). However, if
under the facts and circumstances an
amount larger than the deemed amount is
necessary to pay expenses and
disbursements, then the organization may

Instructions for Schedule A (Form 990 or 990-EZ)

-15-

The organization’s distributable amount
for the current tax year is ordinarily the
greater of:
1. 85% of its adjusted net income for
the prior tax year or
2. Its minimum asset amount for the
prior tax year,
less income taxes imposed on the
organization during the prior tax year. See
Regulations section
1.509(a)-4T(i)(5)(ii)(B).

First tax year. The distributable amount
for the first tax year that an organization is
treated as a non-functionally integrated
Type III supporting organization is zero
rather than the amount as ordinarily
determined. Such organization should
check the box on line 7. However, an
organization that was a non-functionally
integrated Type III supporting organization
in its tax year beginning in 2012 and/or
2013 (or was treated as meeting such
requirements because it met the
requirements of Regulations section
1.509(a)-4(i)(3)(iii) as in effect prior to
December 28, 2012) cannot check the
box on line 7. Also, the distributable
amount as ordinarily determined applies to
every organization for purposes of
determining whether the organization has
an excess of distributions in its tax year
that can be carried over to future years.
Thus, the distributable amount as
ordinarily determined is reported in
Sections C and E.
Emergency temporary reduction. In
cases of disaster or emergency, the IRS
may provide for a temporary reduction in
the distributable amount by publication in
the Internal Revenue Bulletin. In these
cases, the reduced amount should be
reported on line 6 and the reduction noted
in Part VI.

Section D. Distributions

Section D sets forth the supporting
organization’s distributions that count
toward its distribution requirement, and
determines whether the attentiveness
requirement is met. The amount of a
distribution made to a supported
organization is the amount of cash or fair
market value of property on the date of
distribution. The organization must use the
cash method of accounting for this
purpose. See Regulations section
1.509(a)-4(i)(6).

Line 1. Report amounts paid to
supported organizations to accomplish
their exempt purposes. Distributions
furthering the “exempt” purposes of
supported organizations not described in
section 501(c)(3) refer solely to
distributions for section 501(c)(3)
purposes.

A Type III non-functionally integrated
supporting organization must distribute at
least one-third of its distributable amount
each tax year to one or more supported
organizations that are “attentive” to its
operations and to which the supporting
organization is “responsive” (as described
later); thus, the line 10 amount must be at
least 0.333. Carryovers of excess
distributions from prior years do not count
toward the attentiveness requirement.
If the line 10 amount is less than
one-third (that is, the amount of
distributions to supported organizations
that met both the attentiveness test and
responsiveness test is less than one-third
of the distributable amount), then the
organization does not qualify as a Type III
non-functionally integrated supporting
organization for the tax year. See
Regulations sections 1.509(a)-4(i)(5)(i)
and (iii). If the organization does not
otherwise qualify as a public charity, then
the organization is a private foundation
and must file Form 990-PF for the tax
year.

attentiveness of a supported organization
is normally influenced by the amounts
received from the supporting organization,
but evidence of actual attentiveness to the
operations (including investments) of the
supporting organization is of almost equal
importance. Where the supporting
organization supports a particular
department or school of a university,
hospital, or church, the department’s or
school’s total support is considered
instead of the supported organization’s
total support.

DRAFT AS OF
August 14, 2014

Line 2. Report amounts paid to perform
any activity that directly furthers exempt
purposes of supported organizations and
that would otherwise normally be engaged
in by the supported organizations, but only
to the extent that expenses from the
activity exceed income from the activity.
Line 3. Report reasonable and necessary
administrative expenses paid to
accomplish exempt purposes of
supported organizations. Do not include
expenses incurred in the production of
investment income.
Line 4. Report amounts paid to acquire
exempt-use assets. Such assets must be
used (or held for use) to carry out the
exempt purposes of the supported
organizations. The assets may be used or
held by either the supporting organization
or one or more supported organizations; if
the latter, the supporting organization
must make the asset available to the
supported organization(s) free of charge
or for nominal rent. See Regulations
section 53.4942(a)-2(c)(3) for further
discussion of exempt-use assets.
Line 5. Report qualified amounts set
aside for a specific project that
accomplishes the exempt purposes of a
supported organization to which the
supporting organization is responsive. A
qualified set-aside counts toward the
distribution requirement in the tax year set
aside but not again when paid.
Approval required. For each set-aside,
a supporting organization must obtain the
written approval of both the pertinent
responsive supported organization(s) and
the IRS. The supporting organization must
apply to the IRS for approval (using Form
8940) before the end of its tax year in
which the amount is set aside. Explain in
Part VI whether the organization has
requested and obtained the necessary
approvals for the set-aside. See
Regulations section 1.509(a)-4(i)(6)(v) for
more information.
Line 6. Report any other distributions not
described above that the organization
claims are for the use of its supported
organizations, and describe such
distributions in detail in Part VI.
Lines 8–10. Report on line 8 the amount
of distributions reported on line 1 to
supported organizations that met the
attentiveness and responsiveness tests
discussed later, and provide in Part VI the
supplemental information discussed later.

Attentiveness test. A supported
organization is “attentive” to the operations
of a supporting organization if, during the
tax year, at least one of the following
requirements is satisfied:
1. The supporting organization
distributes to the supported organization
at least 10% of the supported
organization’s total support in its tax year
ending before the beginning of the
supporting organization’s tax year. For
example, if supporting and supported
organization both use a calendar year,
and the supported organization has total
support of $X in a year, then the
supporting organization’s support in the
following year must be at least 10% of $X.
Where the supporting organization
supports a particular department or school
of a university, hospital, or church, the
department’s or school’s total support is
considered instead.
2. The amount of support received
from the supporting organization is
necessary to avoid the interruption of a
particular function or activity of the
supported organization. The support is
necessary if either the supporting or
supported organization earmarks the
support for a particular substantial
program or activity of the supported
organization.
3. The amount of support received
from the supporting organization is a
sufficient part of the supported
organization’s total support to ensure
attentiveness, based on all pertinent facts,
including the number of supported
organizations, the length and nature of the
relationship between the supporting and
supported organization, and the purpose
to which the funds are put. The
-16-

Amounts received from a supporting
organization that are held in a donor
advised fund of the supported
organization are disregarded in
determining attentiveness.
See the examples in Regulations
section 1.509(a)-4(i)(5)(iii)(D).
Responsiveness test. A supporting
organization is “responsive” to the needs
and demands of a supported organization
if it meets the responsiveness test set forth
in the instructions for Part IV, Section D,
Lines 2 and 3, with respect to the
supported organization.
Supplemental information required.
In Part VI, provide the following
information:
1. List the supported organizations
that received payments from the
supporting organization to accomplish
their exempt purposes.
2. List the dollar amount paid to each
supporting organization.
3. Identify which of the supported
organizations met both the attentiveness
test and the responsiveness test.
4. Set forth the facts that show how
each such supported organization met
both the attentiveness test and the
responsiveness test.

Section E. Distribution
Allocations

Section E determines whether the
distributable amount for the current tax
year (and any underdistribution for
reasonable cause in a prior year) is
satisfied through current-year distributions
and carryovers of prior-year excess
distributions. Section E also determines
carryovers of excess distributions to future
years. Several lines in Section E are not
yet applicable during the phase-in period
of the new regulations for Type III
non-functionally integrated supporting
organizations. Those lines are grayed out.
In applying distributions, there are three
basic steps.
1. First, apply distributions to
eliminate any underdistribution for
reasonable cause in a prior tax year.

Instructions for Schedule A (Form 990 or 990-EZ)

2. Second, apply distributions to
satisfy the distributable amount for the
current year.
3. Third, carry over to future years any
remaining excess distributions.
Apply the oldest distributions first.
Carryovers of excess distributions from
prior years are always applied in full
before current-year distributions (unlike
the rules for qualifying distributions by
private foundations), and older carryovers
are applied before newer carryovers.
Excess distributions of a given year
cannot be carried over for more than five
years.

underdistribution due to a clerical error.
Under these circumstances, Y first applies
$80,000 of its 2014 distributions of
$290,000 to the 2013 underdistribution of
$80,000 ($200,000 minus $120,000), then
applies $190,000 of its remaining 2014
distributions of $210,000 ($290,000 minus
$80,000) to satisfy its 2014 distributable
amount. Y’s remaining $20,000 of
distributions in 2014 ($290,000, minus
$80,000 allocated to 2013, and minus
$190,000 allocable to 2014) are excess
distributions that may be carried over to
future years.

exception discussed in the instructions for
Lines 5 and 6, later. If the organization met
either of these exceptions, explain in detail
in Part VI how the organization met the
requirements for the exception.
Line 3. On line 3e enter the amount of
distributions in the prior tax year (2013
only) in excess of the distributable amount
for that year (as ordinarily determined) if
the organization was a Type III
non-functionally integrated supporting
organization in such year. The
organization may photocopy the Part V,
Sections A–D, to use as a worksheet in
determining the ordinary distributable
amount and distributions in the prior year.
This amount is also reported in line 3f and
is applied in the following priority:
1. First to any prior-year
underdistributions on line 3g,
2. Second (if any remaining amount)
to the current-year distributable amount on
line 3h, and
3. Third (if any remaining amount) on
line 3j for carryover to future years.

DRAFT AS OF
August 14, 2014

Example 1. X is a Type III
non-functionally integrated supporting
organization that for its tax year including
December 28, 2012, and through its
following 2013 tax year meets the
requirements of Regulations section
1.509(a)-4(i)(3)(iii) as in effect prior to
December 28, 2012. Under transition
rules, X is deemed to meet its distribution
requirement for 2013, but its distributable
amount is calculated in the ordinary
manner to determine its excess
distributions. For 2013, X has a
distributable amount, as ordinarily
determined, of $80,000 and distributions
of $100,000, and thus excess distributions
of $20,000. For 2014, X has a distributable
amount of $95,000 and distributions of
$85,000. Under these circumstances, X
first applies its 2013 excess distributions
carryover of $20,000 to the 2014
distributable amount of $95,000. Next, X
applies $75,000 of its 2014 distributions of
$85,000 to the remaining 2014
distributable amount. X thus has excess
distributions of $10,000 in 2014 (2014
distributions of $85,000 less $75,000
applied to the 2014 distributable amount),
which it may carry over in the next five tax
years until applied.
Example 2. Y is a Type III supporting
organization that for its tax year including
December 28, 2012, meets the
requirements of Regulations section
1.509(a)-4(i)(3)(iii) as in effect prior to
such date, but does not meet such
requirements in its following 2013 tax year
and, therefore, does not benefit from the
transition rule for its 2013 tax year. Y
calculated that its distributable amount
was $120,000 for 2013, and made
distributions of that amount. Early in its
2014 tax year, Y discovers that its
distributable amount for 2013 actually was
$200,000 and within 180 days makes a
$90,000 distribution ($80,000 to cover the
underdistribution for 2013 and $10,000 as
part of its 2014 distributions). Later in the
2014 tax year, Y makes additional
distributions totaling $200,000. Y’s
distributable amount in the 2014 tax year
is $190,000. In its 2014 Form 990, Y
claims reasonable cause for the 2013

Line 1. Report the distributable amount
for 2014 from Section C, line 6.

Line 2. Under transition rules, most Type
III non-functionally integrated supporting
organizations are considered to meet their
distribution requirement for their first tax
year beginning after December 28, 2012.
These include:
1. A Type III supporting organization
in existence on December 28, 2012, that
met and continued to meet the
requirements of Regulations section
1.509(a)-4(i)(3)(iii) as in effect prior to
December 28, 2012;
2. A Type III supporting organization
in existence on December 28, 2012, that
met the requirements of Regulations
section 1.509(a)-4(i)(3)(ii) as in effect prior
to December 28, 2012, in its tax year
including December 28, 2012, but not the
following year; and
3. An organization that was treated as
a non-functionally integrated Type III
supporting organization for the first time in
its first tax year beginning after December
28, 2012 (whether or not it came into
existence after such date).

A Type III supporting organization in
existence on December 28, 2012, that met
the requirements of Regulations section
1.509(a)-4(i)(3)(iii) as in effect prior to
December 28, 2012, for its tax year
including December 28, 2012, but not the
following tax year (the 2013 tax year) was
required to meet the distribution
requirement as ordinarily determined in its
2013 tax year. Such organization must
determine and report on line 2 any
underdistributions for the 2013 tax year.
The organization may photocopy the Part
V, Sections A–D, to use as a worksheet in
determining the ordinary distributable
amount and distributions in the 2013 tax
year.
If the organization had any
underdistributions, then it did not qualify
as a Type III non-functionally integrated
supporting organization in the 2013 tax
year (and would be classified as a private
foundation unless it met the requirements
of another public charity status) unless it
met the requirements of the reasonable
cause exception or the judicial proceeding

Instructions for Schedule A (Form 990 or 990-EZ)

-17-

Excess distributions cannot be carried
over for more than five tax years and thus
are forfeited if not used in the fifth year of
carryover. Such amounts are set forth in
line 3i (not applicable to the 2014 return).
Line 4. Apply the current-year
distributions (from Section D, line 7) in the
same order of priority as described in the
instructions for Line 3 to any prior-year
underdistributions (line 4a) and
current-year distributable amount (line 4b)
remaining after applying carryovers on
line 3. Any remaining distributions are
reported on line 4c for carryover to future
years.
Lines 5 and 6. If the current-year
distributable amount is greater than the
sum of the excess distributions carryover
from the prior year plus the current-year
distributions, then the organization does
not meet the distribution requirement and
cannot qualify as a Type III
non-functionally integrated supporting
organization for the tax year, unless an
exception applies. If the organization does
not qualify as a supporting organization or
otherwise as a public charity for the tax
year, then it is a private foundation and
must file Form 990-PF for the tax year and
subsequent years until private foundation
status is terminated under section 507. If
either the reasonable cause or judicial
proceeding exception applies, then
explain in detail in Part VI how the
organization met the requirements for the
exception.
Reasonable cause exception. An
organization that fails to distribute its
distributable amount will not be classified
as a private foundation for the year of the

failure if the organization establishes to the
satisfaction of the IRS that:
1. The failure was due to unforeseen
events or circumstances beyond its
control, a clerical error, or an incorrect
valuation of assets;
2. The failure was due to reasonable
cause and not to willful neglect; and
3. The distribution requirement is met
within 180 days after the organization is
first able to distribute its distributable
amount notwithstanding the unforeseen
events or circumstances, or within 180
days after the clerical error or incorrect
valuation was or should have been
discovered.

Judicial proceeding exception. An
organization is excused from meeting the
distribution requirements to the extent of a
conflicting mandatory provision in its
governing instrument, if a judicial
proceeding is pending to reform a
governing instrument that prohibits
compliance, under the circumstances set
forth in Regulations section
1.509(a)-4(i)(11)(ii)(E).

Part VI. Supplemental
Information

Use Part VI to provide other narrative
information required by these instructions
or to supplement responses to questions
on Schedule A (Form 990 or 990-EZ).
Identify the specific part and line number
that the response supports, in the order in
which they appear on Schedule A (Form
990 or 990-EZ). Part VI can be duplicated
if more space is needed.

DRAFT AS OF
August 14, 2014

Amounts paid to meet a distribution
requirement of a prior tax year cannot also
be counted toward the distribution
requirement for the tax year in which paid.

Lines 7 and 8. Enter on line 7 the
prior-year carryover and the current-year
distributions to the extent not applied to
prior-year underdistributions and the
current-year distributable amount (and not
already carried over for five tax years).
The organization may carry over these
amounts to future years. Prior-year
carryovers are applied before current-year
distributions.

-18-

Do not include in Part VI the
names of any donors, grantors, or
CAUTION
contributors because Part VI will
be made available for public inspection.

!

Instructions for Schedule A (Form 990 or 990-EZ)