Nonprofit Law/509a1 or 509a2?


Our PTO is in the process of becoming a 501c3 organization. I am unclear how to delineate our public charity status. All of our income comes from the general public. We have several fundraisers each year. The largest generates income from public donations without us supplying goods or services. The second largest is a public raffle/auction in which we do provide prizes, which are also donated by the public. So, I was wondering if we qualify as a public charity under 509a1 section 170b1Avi (receives substantial support from general public) or under 509a2 (receives more than 1/3 support from contributions and receipts from activities related to exempt function). I understand the designation matters when it is time to complete the 990 return. Thanks!

The least work is found if your organization qualifies under 509(a)(1) and it would appear from what you wrote, that your organization would be getting at least 33% of its support from the general public and, therefore, it would qualify under that subsection of section 509. See starting in the middle column on page 34  "Qualifying as Public Supported".

Harvey Mechanic, Attorney at Law -

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.  

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Harvey Mechanic


DO NOT GIVE ME INFORMATION THAT YOU WANT KEPT CONFIDENTIAL. I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's possible unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "" without the quotes and then add your search terms before hitting enter.


I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.


B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.

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