Lapham Foundation, Inc. - Page 18




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               beneficiary organization’s primary program or activity                 
               so long as such program or activity is a substantial                   
               one.                                                                   
               All pertinent factors are to be considered under the                   
          foregoing subtest in order to determine whether the amount of               
          support received by the beneficiary organization is sufficient to           
          ensure attentiveness.  Sec. 1.509(a)-4(i)(3)(iii)(d), Income Tax            
          Regs.  Factors highlighted by the regulations include the number            
          of beneficiaries, the length and nature of the relationship                 
          between the organizations, the purpose to which the funds are               
          put, and the imposition of a requirement that the supporting                
          organization furnish reports to the supported organization.  Id.            
          As a general premise, the regulations provide that the greater              
          the amount involved as a percentage of the beneficiary                      
          organization’s total support, the greater the likelihood that the           
          required degree of attentiveness will be present.  Id.  There is,           
          however, the caveat that “evidence of actual attentiveness by the           
          beneficiary organization is of almost equal importance.”  Id.               
               C.  Section 509(a)(3)(C)                                               
               Section 509(a)(3)(C) specifies the third basic requirement             
          for all charitable entities wishing to be classified as                     
          supporting organizations.  A supporting organization may not be             
          controlled directly or indirectly by disqualified persons,                  
          including substantial contributors; their family members; and               
          corporations, partnerships, or trusts in which interests of more            






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Last modified: May 25, 2011