Form 1023 Instructions
Part VIII. Your Specific Activities

Activities for your Organization:

Political Campaigns

If you are a tax-exempt entity, you are prohibited from supporting or opposing candidates for public office in any political campaign. If you devote time and resources to attempting to lobby or influence legislation, such activities must be outlined and broken down to include a percentage of your total time and total funds spent on those legislative activities. You must also submit representative copies of your legislative literature, brochures, pamphlets, etc.

Gaming Activities

Participating and/or hosting gaming activities may be subject to unrelated business income tax.

Fundraising Activities

Fundraising may be conducted by your employees, volunteers, through an agent, or through an independent contractor. All donations must be accounted for. Large donations may be subject to additional documentation rules.

Governmental Unit Affiliations

You are affiliated with a government unit if you are created by, controlled by, or closely related to a government unit. You must include each governmental unit and describe your relation to it. Include details of any financial reports or audits required by governmental units. Also, if you have any authority given to you by the governmental unit, you generally do not qualify for exemption.

Developing & Managing facilities

If you were to plan, finance, construct, or provide similar services in the acquisition of real property, such as land or a building, you would be subject to the rules governing developing facilities. You would need to provide the information regarding the services provided and your organization’s role in the development. For example, if you were to put together an arrangement to acquire a nursing home through the issuance of tax-exempt bonds. Also, if you direct or administer to a real property, you would be subject to the rules governing facility management. For example, you would provide information about an organization hired to administer a museum gift shop.

Joint Ventures

If you have a legal agreement in which two or more persons jointly undertake a transaction for mutual profit, you are qualified as a joint venture. Typically, each person contributes assets and shares risk.

Childcare Organization

Those individuals who provide care for children away from their homes may qualify for tax-exempt status. If an organization provides care for children away from their homes, all of the childcare enables individuals to be gainfully employed, and the services provided by the organization are available to the general public, it qualifies under this exemption.

Intellectual Property

Intellectual property is inclusive of things such as patents, copyrights, trade names, trademarks, service marks, formulas, know-how, and trade secrets.

Acceptance of Contributions

Depending on the organization making the contribution, there may be additional restrictions on how the monies may be used, and whether or not your organization can accept the contribution under the terms which they were given.

Organization's Operations in Foreign Countries

Charitable activities that qualify as charitable in a domestic setting are also charitable when carried out overseas. A domestic organization that carries on part or all of its activities outside of the United States is not precluded from qualifying as an IRC 501(c)(3) organization on that count.

Making of Grants, Loans or Other Distributions

If they are determined to be charitable activities domestically, then they must be documented similarly. In addition, if there are any local restrictions, the organization is also subject to those laws.

Making of Grants, Loans, or Other Distributions to Foreign Organizations

If they are determined to be charitable activities domestically, then they must be documented similarly. In addition, if there are any local restrictions, the organization is also subject to those laws.

Close Connection with Other Organizations

This is broadly defined as a relationship in which you control the organization or it controls you through common officers, directors, trustees, authority to approve budgets/expenditures, or if you operate in a coordinated manner with respect to facilities, programs, employees, or other activities.

Hospital Service Organization

A place which treats any physical or mental disability or condition, whether as an inpatient or outpatient. This includes hospitals, rehabilitation centers, outpatient clinics, community mental health centers, or medical research organizations.

Educational Organization

This term refers to a school whose primary function is to present formal instruction and maintain normal faculty and curriculum for an enrolled body of pupils.

Charitable Risk Pool

An organization operated to pool insurable risks of its chosen organization members. It must be organized under state law provisions authorizing a risk pool arrangement.

Schools, Colleges, and Universities

These are primarily educational organizations whose main objective is to educate an enrolled student body. All scholarships, fellowships, educational loans, travel/study expenses, or similarly purposed financial endorsements are regulated by the IRS.

Public School Detail

Can either be a public elementary or secondary school, and functions as a nonprofit institutional day or residential school that provides education at either the primary or secondary level as determined under state law.

Finance Facilities

Any entity that accepts deposits in the ordinary course of a bank or similar business, holds financial assets for the account of others as a substantial portion of its business, is primarily in the business of investing, reinvesting, trading in securities, partnership interests, commodities, or any interest in securities, partnership interests, or commodities.

Racially Nondiscriminatory Policy

The IRS requires all tax-exempt private schools to have and publish a racially nondiscriminatory policy that applies to all facets of student life, with no exclusions. This statement must spell out that there will be no discrimination against racially diverse students or faculty in any fashion. Failure of the school to maintain and comply with this policy can mean the revocation of the tax-exempt status.

Racial Composition of the Organization

If and when the institution is examined, the symmetric composition between non-whites and whites, and how authority is distributed between the two will be examined.

Loans and Scholarships Awarded

Once a financial amount is awarded to an individual or organization from a tax-exempt institution, it is up to the organization to make sure the funds are spent in the manner in which it was intended. They must have reasonable means in place to ensure that this is carried out.

Incorporators or Founders

The founding member(s) of the organization applying for tax exemption.