Charitable Planning – How to Check Tax-Exempt Status

Knowing the tax (or tax-exempt) status and public charity classification of an organization is crucial when selecting grantees to receive charitable funds from a private foundation, distributions from a donor-advised fund or tax-deductible charitable contributions from individuals. Grant-makers and donors should always confirm this status before making the grant or donation. There are various ways to check a charity’s tax-exempt status and access other information about the charity, such as its recent IRS returns or copies of its tax-exempt determination letter.

Go to the Source

Potential donors and grant-making foundations can always contact a charity directly to ask for written confirmation of its current tax-exempt status or a copy of its tax-exempt determination letter or initial exemption application, which the organization is required to share under the tax code. Often, a charity’s mission, programs and/or operations will have evolved over the years since the exemption application was filed, so it may be more useful to request copies of the charity’s recently filed IRS information returns, such as Form 990, 990-EZ, 990-PF and 990-T. In addition to the exemption application, a charity is required to provide its three most recent information returns upon request.

In the context of a formal grant application, these requests are routine. For individual donors or for funders who prefer to conduct initial due diligence before engaging directly with a charity, there are some easy and efficient ways to check public sources for the same information.

Use IRS Search Tools

The IRS’ Tax-Exempt Organization Search (TEOS) will confirm whether a charity is in the IRS Publication 78 Data (Pub. 78), which lists organizations that can receive tax-deductible contributions. Under the tax rules, users may rely on Pub. 78 to determine the deductibility of their contributions. Note that certain eligible donees—such as churches, subordinates exempted through a group exemption and governmental units—may not be listed, so their exempt status may need to be confirmed directly. TEOS also allows users to view a charity’s recently filed Form 990s and determination letters issued since Jan. 1, 2014. Alternatively, users can request copies of charitable returns or determination letters that are not available on the IRS website by filing Form 4506-A (by mail or fax) or Form 4506-B (by email) with the IRS, although it will likely be easier to request this information directly from the charity. For more detailed information about a charity, you can also search the IRS Business Master File (BMF), available via a link on the IRS website.

Check Privately Run Sites

The IRS tools can be cumbersome to navigate, so for a quick check of a charity’s recent data and Form 990s, many donors and funders refer to Candid.org’s site, Guidestar, which is itself a nonprofit platform. There you can access financial and governance information about every nonprofit organization in IRS Pub. 78 and view their Form 990s. For a subscription fee, donors and funders can use Guidestar’s Charity Check service to obtain a time-stamped report confirming an organization’s current status in IRS Pub. 78 and the IRS BMF and to check whether the charity is listed on the Automatic Revocation List. Charity Check also will confirm the organization’s Office of Foreign Assets Control (OFAC) status.

In addition, ProPublica.org, an investigative journalism platform, offers Nonprofit Explorer, a public, searchable database of Form 990s.

For donors/funders seeking more in-depth analysis about charities, various nonprofit sector organizations rate charities based on measures such as performance/impact, leadership and governance, financial accountability and stewardship, transparency in fundraising, and organizational culture. Charity Navigator and Better Business Bureau’s Wise Giving Alliance are two such ratings platforms that may be helpful.