7.1.1 Basic Quiz -- Types of Public Charities

Charities must be organized partly for charitable purposes.

True False

While charities must be operated for charitable purposes, charitable purposes need not be the exclusive purpose of the charitable organization.

True False

Charitable purposes include only religious and scientific purposes.

True False

The operational test examines the manner in which the charity actually operates as opposed to the way the founding documents direct the organization to act.

True False

There are only two ways in which to measure whether a charity's activities are for a charitable purpose: Public benefit and private inurement.

True False

The prohibition against private inurement requires that a charity not give benefits directly to people that are closely related to the charity.

True False

There is only one way to qualify as a public charity, and that is to operate as a traditional public charity.

True False

Internal Revenue Code Sec. 509(a) describes the three main ways that a charitable organization may qualify as a public charity.

True False

Churches and schools are both examples of charitable organizations that are not typically classified as public charities.

True False

A charity can demonstrate that it has broad public support by showing that one-third of the total support received by the charity over the past four years is from the general public.