Why Form 990 Schedule A Matters for Public Charities

Nonprofits know that filing Form 990 is more than a compliance requirement—it’s how they demonstrate transparency, maintain tax-exempt status, and build trust with the public. But for many organizations, one of the most challenging aspects of Form 990 is Schedule A. This section, which determines whether a nonprofit qualifies as a public charity, plays a critical role in shaping how the IRS, funders, and donors view an organization.



In this article, we’ll break down what Schedule A is, who needs to file it, how the public support test works, common mistakes nonprofits make, and why it directly impacts donor confidence. Finally, we’ll explain how working with experts like Presti & Naegele can ensure your nonprofit’s Schedule A is accurate, strategic, and compliant.

What Is Form 990 Schedule A?

Form 990 is the annual information return that most tax-exempt organizations must file with the IRS. While the core form reports high-level details about revenue, expenses, and activities, Schedule A digs deeper into how an organization receives its funding.

Specifically, Schedule A is used to:

• Prove public charity status: The IRS requires charities to demonstrate they are supported by the general public, not just a small group of donors or insiders.
• Differentiate public charities from private foundations: Private foundations face different rules, including stricter excise taxes and reporting requirements.
• Provide transparency for funders and donors: The information in Schedule A shows whether contributions come from a broad base of supporters or a concentrated few.

In short, Schedule A is where the IRS and the public can see how your nonprofit is funded and whether you qualify as a public charity.

Presti & Naegele’s Form 990 services include specialized expertise in handling Schedule A, ensuring every detail reflects both compliance and credibility.

Who Needs to File Schedule A?

Not every organization files Schedule A, but many do. It applies primarily to 501(c)(3) public charities, which are required to demonstrate that they receive substantial support from the general public or government sources.

Organizations that typically must include Schedule A are:

• Charitable organizations recognized under section 501(c)(3).
• Educational institutions, hospitals, and churches—although some churches and church-affiliated organizations may be exempt from filing.
• Nonprofits that rely heavily on donations or program service revenue.
• Newer nonprofits working to establish their public charity status.

If your nonprofit doesn’t complete Schedule A when required, or does so inaccurately, the IRS may question your public charity designation. This could result in reclassification as a private foundation, which comes with more burdensome rules.

The experienced team at Presti & Naegele helps nonprofits determine whether Schedule A is required and ensures it’s prepared correctly the first time.

The Public Support Test Explained

The most important part of Schedule A is the public support test. This is how the IRS measures whether your organization truly receives support from the public. There are two primary ways a nonprofit can pass the test:

1. The 509(a)(1)/170(b)(1)(A)(vi) Test

• This test is for nonprofits that rely primarily on donations, grants, and contributions.
• To qualify, at least one-third of the organization’s total support must come from the public (individual donors, corporations, and government grants).
• The test looks at a rolling five-year period, which smooths out fluctuations in donor support.

2. The 509(a)(2) Test

• This test applies to organizations that generate revenue through program services—for example, museums that charge admission or clinics that collect patient fees.
• To qualify, a significant portion of revenue must come from program services, with strict limits on how much can come from a small number of donors.

Both tests require precise calculations, clear categorization of revenue, and consistent recordkeeping. Missteps here can lead to the IRS questioning your status.

Because these rules are complex, many nonprofits rely on professionals like Presti & Naegele to ensure their public support tests are applied correctly and filed without error.