A 501(c)(3) organization is a public charity, not a private foundation, if it can show that it is supported by the public. For most donor-funded charities, that showing is the public support test in Part II of Schedule A, the schedule every public charity attaches to its Form 990 or 990-EZ. Fail it and the organization may be reclassified as a private foundation, with stricter rules and a different return.
This calculator applies the Part II arithmetic to five years of your numbers, including the 2% limit on large donors.
How this calculator works
The test is for organizations described in section 170(b)(1)(A)(vi) and 509(a)(1): charities that rely mainly on gifts and grants. It uses five tax years: the year you are reporting and the four before it, added together.
Inputs (five-year totals):
- Gifts, grants and contributions, including membership fees that are really gifts (Schedule A, Part II, line 1), plus any tax revenues levied for you and services furnished free by a government (lines 2 and 3). Leave out "unusual grants," which are excluded from the test.
- Of which from governmental units and other publicly supported organizations. These count as public support in full. The 2% limit doesn't apply to them, so don't list them as large donors.
- Gross investment income: interest, dividends, rents and royalties (line 8).
- Net unrelated business income, whether or not the activity is regularly carried on (line 9). A net loss counts as zero.
- Other income that counts as support (line 10). Don't include gross receipts from your exempt programs (line 12) or gains from selling capital assets; those are outside total support for this test.
- Up to five large donors' totals for the five years. Treat a donor and related persons (a spouse, certain family members, entities they control) as one donor.
Rules:
- Total support = gifts, grants and contributions + gross investment income + net unrelated business income + other income.
- The 2% limit = 2% of total support. For each listed donor, the amount above that limit is excess.
- Public support = gifts, grants and contributions − the total excess of all listed donors.
- Public support percentage = public support ÷ total support.
Result:
| Public support percentage | Result |
|---|---|
| 33⅓% or more | Passes. The organization is publicly supported for this year and the next. |
| 10% to under 33⅓% | May pass under the facts-and-circumstances test (see below). |
| Under 10% | Fails Part II. |
If you tell the calculator the organization is in its first five tax years as a 501(c)(3), it reports that the organization is treated as publicly supported automatically, and that the computation becomes mandatory from year six.
A youth literacy nonprofit in its eighth year, with these five-year totals:
- Gifts, grants and contributions: $900,000, of which $150,000 came from a community foundation
- Gross investment income: $40,000
- Net unrelated business income: $10,000
- Other income: $50,000
Total support is $900,000 + $40,000 + $10,000 + $50,000 = $1,000,000, so the 2% limit is $20,000.
| Donor | Five-year gifts | Excess over $20,000 |
|---|---|---|
| Founding family | $400,000 | $380,000 |
| Local business | $60,000 | $40,000 |
| Longtime individual donor | $18,000 | $0 |
Public support is $900,000 − $420,000 = $480,000. The percentage is $480,000 ÷ $1,000,000 = 48.00%, so the organization passes. The community foundation's $150,000 counts in full.
What it doesn't cover
- The facts-and-circumstances test. Between 10% and 33⅓%, the organization must also show it is organized and operated to attract new and additional public or governmental support on a continuous basis. Factors include an ongoing fundraising program, a governing body that represents the broad interests of the public, and services provided directly to the public. That judgment can't be automated.
- The prior-year rule. An organization that falls short this year can still qualify for this year if it met 33⅓% (or the 10% test) on the previous year's Schedule A.
- Part III (section 509(a)(2)). Organizations supported mainly by admissions, sales and program fees are tested under different rules in Part III, which this calculator doesn't model.
- Unusual grants, related-person grouping and year-by-year entry. Deciding whether a grant is "unusual," and which donors to combine, depends on facts you supply. The calculator also works from five-year totals rather than each year's column.
Related guides
- The Schedule A public support test, explained covers the rules in depth.
- Form 990 schedules explains where Schedule A fits.
- Private foundation payout and excise tax shows what changes if an organization becomes a private foundation.
Frequently asked questions
Why do our largest gifts count only partly?
The test is meant to show broad support. Gifts from any one individual, trust or corporation count only up to 2% of total support for the five years. The rest still counts in total support, so a single very large donor can pull the percentage down.
Do government grants and grants from other charities count in full?
Grants from governmental units and from publicly supported organizations under section 170(b)(1)(A)(vi) are not subject to the 2% limit and count in full. Grants from a private foundation are subject to the limit, like an individual's gifts.
What happens if we fail the test?
If the organization fails both the 33⅓% and 10% tests for this year and the prior year, and doesn't qualify under another public charity category such as Part III, it is treated as a private foundation from the beginning of the year and files Form 990-PF instead.
We were founded three years ago. Do we need to compute this?
No. A new 501(c)(3) is treated as publicly supported for its first five tax years and checks the line 13 box on Schedule A.
Sources
- IRS: 2025 Instructions for Schedule A (Form 990), Part II. irs.gov
- LII: 26 CFR § 1.170A-9, definition of section 170(b)(1)(A) organization. law.cornell.edu
- IRS: 2025 Instructions for Form 990-PF, initial return of a former public charity. irs.gov
IRS figures change; inflation-adjusted amounts are updated each year. We review this page when the IRS publishes new instructions.
990IRS.com is a private company, not the IRS. This page is general information, not legal or tax advice for your organization. Example organizations and figures are hypothetical.
