Form 990 Schedule A Instructions (Page 14 of 19) in pdf

Section E. Type III Functionally

activities must be “direct furtherance”

Sections A through E of Part V show

activities. Direct furtherance activities

whether the organization has satisfied

Integrated Supporting

are conducted by the supporting

its distribution and attentiveness

Organization

organization itself, rather than by a

requirements for its tax year. Sections A

supported organization. Holding title to

and B determine the organization’s

Line 1. A Type III supporting

exempt-use assets and managing them

adjusted net income and minimum

organization must constitute an integral

are direct furtherance activities.

asset amount, which amounts are used

part of one or more of its supported

Fundraising, investing and managing

in determining the distributable amount

organizations by maintaining significant

non-exempt-use assets, grant-making

in Section C. Section D determines the

involvement in its operations and

to organizations, and grant-making to

organization’s distributions that count

providing support on which the

individuals (unless it meets the

toward the distributable amount and

supported organization is dependent.

requirements of Regulations section

determines whether the attentiveness

To satisfy this requirement as a Type III

1.509(a)-4(i)(4)(ii)(D)) aren't direct

requirement is met. Section E

functionally integrated supporting

furtherance activities.

determines whether the distributable

organization, an organization may (a)

amount is satisfied through current

pass an Activities Test (see instructions

But for. In addition, the direct

distributions and prior-year carryovers,

for Line 2, later), (b) be the parent of its

furtherance activities must be activities

and determines carryovers to future

supported organizations (see

in which, but for the supporting

years.

instructions for Line 3, later), or (c)

organization’s involvement, the

support one or more governmental

supported organization would normally

A trust is excepted from the general

entities (see Support of governmental

be involved.

distribution and attentiveness

entity, later). If the organization can't

requirements (and need not complete

Examples include holding and

satisfy any of these tests, it may still

Sections A through E) if on November

managing facilities used by a church for

qualify as a Type III non-functionally

20, 1970, it met and continues to meet

its religious purposes, operating a food

integrated supporting organization (see

the requirements set forth in

pantry for a group of churches that

Part V, later).

Regulations section 1.509(a)-4(i)(9). A

normally would operate food pantries

trust that claims this status by checking

Support of governmental entity. A

themselves, and maintaining local parks

the box on line 1 at the beginning of Part

Type III supporting organization meets

for a community foundation that

V must explain in Part VI how it meets

the integral part test for a functionally

otherwise would maintain those parks.

each of the requirements. A trust that

integrated supporting organization if it

See Regulations section

has obtained a ruling from the IRS on

(1) supports at least one supported

1.509(a)-4(i)(4)(v) for more detailed

this issue must so indicate in Part VI.

organization that is a governmental

examples.

entity to which the supporting

Section A. Adjusted Net Income

Line 3. Parent of Supported Organi-

organization is responsive (as

zations. To qualify as the parent of all

The principles of section 4942(f) and

discussed in instructions for Section D,

the supported organizations, a

Regulations section 53.4942(a)-2(d)

lines 2 and 3, earlier) and (2) engages in

supporting organization must (1) have

apply in determining adjusted net

activities for or on behalf of such

the power to appoint or elect, directly or

income. See Regulations section

governmental supported organization

indirectly, a majority of the officers,

1.509(a)-4(i)(5)(ii)(B).

that performs the functions or carries

directors, or trustees of every supported

out the purposes of such governmental

Prior and current year columns. The

organization; and (2) exercise a

supported organization and that, but for

organization’s adjusted net income for

substantial degree of direction over the

the involvement of the supporting

the prior tax year is used in determining

policies, programs, and activities of

organization, would normally be

the organization’s distributable amount

every supported organization.

engaged in by the governmental

for the current tax year. The form also

supported organization itself. See

allows for reporting the organization’s

Part V. Type III

Notice 2014-4. A Type III supporting

adjusted net income for the current tax

Non-Functionally

organization that claims to meet the

year for use in next year’s calculations;

Integrated 509(a)(3)

integral part test for a functionally

this reporting is optional but may be

integrated supporting organization by

helpful if the organization anticipates

Supporting Organizations

supporting a governmental entity must

being required to complete Part V next

A Type III supporting organization (other

describe in Part VI how it met these

year.

than a Type III functionally integrated

requirements for the tax year.

Definition. Adjusted net income is

supporting organization) generally must

Line 2. Activities Test. To meet the

gross income for the tax year less

satisfy a distribution requirement

activities test of a Type III functionally

deductions allowable to a corporation

described in Regulations section

integrated supporting organization,

subject to tax under section 11, with

1.509(a)-4(i)(5)(ii) along with an

substantially all of the supporting

certain modifications discussed in the

attentiveness requirement described in

organization’s activities must (1) directly

line instructions later. In computing

Regulations section 1.509(a)-4(i)(5)(iii)

further the exempt purposes of the

gross income and deductions, the

to meet the integral part test for a Type

supported organization(s) to which the

principles of the income tax provisions

III relationship. To satisfy the distribution

supporting organization was

of the Code apply (except to the extent

requirement, the organization must

responsive, and (2) be activities that

inconsistent with section 4942 or the

make a minimum amount (distributable

such supported organization(s) would

underlying regulations), but exclusions,

amount) of distributions to or for the use

normally be engaged in but for the

deductions, and credits aren't allowed

of one or more supported organizations.

supporting organization’s involvement.

unless expressly provided for under

Carryovers of excess distributions from

section 4942 or the underlying

certain prior years may be used for this

Direct furtherance. Substantially all

purpose.

of the supporting organization’s

-14-

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

Form 990 Schedule A Instructions Page 14

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