Section 1. Request for Reclassification as a

Private Foundation, as Described in Section 509(a) Private foundations are required under section 4945(g) to obtain advance approval of their grant-making procedures related to scholarships, fellowships, prizes, awards, or other specified grants to achieve a specific objective, produce a report or similar product, or enhance certain capacities, skills, or talents of a grantee. If you are requesting reclassification as a private foundation and conduct, or will conduct, grant-making activities described under section 4945(g), submit a statement to that effect and submit a separate Form 8940 for Part II (Form 8940, Schedule C).

Line 1. Answer “Yes” if you normally fail to meet both the 33 ¹ /3% of support test and the facts-and-circumstances test (that is, you normally fail to receive at least 33 ¹ /3% of your total support from governmental units, direct or indirect contributions from the public, or a combination of these sources, and you normally fail to receive at least 10% but less than 33 ¹ /3% of your total support from contributions made directly or indirectly by the general public or from governmental units and fail to satisfy several other factors). See Regulations section 1.170A-9(f)(3). If “No,” explain.

Line 2. Answer “Yes” if you normally fail to receive more than one-third of your support from any combination of gifts, grants, contributions, membership fees, and gross receipts from permitted sources, or normally receive more than one-third of your support from gross investment income and the excess of the amount of unrelated business taxable income over the amount of taxes imposed by section 511. If “No,” explain.

Line 3. Indicate your requested effective date of reclassification as a private foundation.

Line 4. Answer “Yes” if your governing instrument meets the requirements of section 508(e).

Section 508(e) provides that a private foundation isn’t tax exempt unless its organizing document contains specific provisions. These specific provisions require that you operate to avoid liability for excise taxes under sections 4941(d), 4942, 4943(c), 4944, and 4945(d). You can also meet these provisions by reliance on state law.

See Pub. 557 for samples of provisions that will meet section 508(e). Also, see Appendix B of the Instructions for Form 1023 for a list of states that have enacted statutory provisions that satisfy the requirement of section 508(e), subject to notations. Appendix B is based on Rev. Rul. 75-38, 1975-1 C.B. 161.