Episode
Enrolled Agent Exam [Part 2] 87, Section 501(c)(3) — Public Charity vs Private Foundation
- Podcast
- Finance Exam Prep
- Published
- Jul 23, 2026
- Duration seconds
- 198
- Processing state
not_requested- Canonical source
- https://open-exam-prep.com/
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Summary
This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams. In this episode you will learn: - That all 501(c)(3) organizations are considered private foundations by default unless they can prove they qualify for public charity status. - Which types of organizations, such as churches, schools, and hospitals, are automatically classified as public charities. - How the one-third public support test is used to determine if an organization qualifies as a public charity based on its funding sources. - The key operational differences, including the 1.39% excise tax on net investment income that applies only to private foundations. - The 5% minimum annual distribution requirement that private foundations must meet to avoid significant penalties. For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep