Skip to Main Content
GiftLaw Pro
Charitable Giving & Tax Information Service
Back to Gift Planning Website
GiftLaw Pro Home   >  Chapter 7 - Charitable Organizations  >  7.1 Public Charities  >  7.1.9 Supporting Organizations vs. Private Foundations  >  Basic Quiz

Basic Quiz - 7.1.9 Supporting Organizations vs. Private Foundations

1. When donors make cash contributions to supporting organizations (SOs), they can deduct the value of their contributions up to 50% of their adjusted gross income.
           
2. When appreciated property is donated to a private foundation, the deduction is based on the property’s fair market value.
           
3. Non-functionally integrated Type III SOs are required to make some type of distribution to their supported charities on an annual basis.
           
4. Type I and Type II SO donors typically enjoy more control than donors who establish private foundations.
           
5. Supporting organizations and private foundations must, upon formation, designate the charities that they will support.
           
6. Private foundations, not supporting organizations, must pay a tax on investment income.
           
7. Supporting organizations are not subject to the excess benefit transaction rules that apply to public charities.
           
8. If the excess business holding rules are violated, private foundations and supporting organizations are both given three years to sell the business interest.
           
9. The rule prohibiting jeopardizing investments includes investments that show a lack of reasonable business care and prudence in providing for the long and short-term financial needs of a private foundation.
           
10. Supporting organizations are not permitted to participate in political campaigns. In contrast, private foundations may participate in lobbying efforts.