1998 Department of the Treasury

Internal Revenue Service

Instructions for
Schedule A (Form 990)
Section references are to the Internal Revenue Code unless otherwise noted.

Contents Form 990, or Form 990-EZ, does not satisfy its Unless the amounts are reported in column
filing requirement and may be charged a $20 (c), report, as deferred compensation in column
Part Page a day penalty ($100 a day for large (d), salaries and other compensation earned
I Compensation of the Five Highest organizations). See General Instruction K of the during the period covered by the return, but not
Paid Employees Other Than Instructions for Form 990 and Form 990-EZ for yet paid by the date the organization files its
Officers, Directors, and Trustees ..... 1 details on this and other penalties. return.
To avoid having to respond to requests for Column (e). Enter in column (e) both taxable
II Compensation of the Five Highest missing information, please be sure to and nontaxable fringe benefits (other than de
Paid Independent Contractors for complete all applicable line items; to answer minimis fringe benefits described in section
Professional Services....................... 1 “Yes” or “No” to each question on the return; 132(e)). Include expense allowances or
III Statements About Activities ............. 1 to make an entry (including a zero when reimbursements that the recipients must report
appropriate) on all total lines; and to enter as income on their separate income tax
IV Reason for Non-Private Foundation
“None” or “N/A” if an entire part does not apply. returns. Examples include amounts for which
Status ............................................... 2
the recipient did not account to the organization
IV-A Support Schedule............................. 4 or allowances that were more than the payee
spent on serving the organization. Include
V Private School Questionnaire .......... 4 Specific Instructions payments made in connection with
VI-A Lobbying Expenditures by Electing If you need more space for any part or line indemnification arrangements, the value of the
Public Charities ................................ 6 item, attach separate sheets on which you personal use of housing, automobiles, or other
VI-B Lobbying Activity by Nonelecting follow the same format and sequence as on the assets owned or leased by the organization (or
Public Charities ................................ 8 printed form. Show totals on the printed form. provided for the organization's use without
Be sure to put the organization's name and charge), as well as any other taxable and
VII Information Regarding Transfers To employer identification number on the attached nontaxable fringe benefits. See Pub. 525,
and Transactions and Relationships separate sheets and identify the part or line Taxable and Nontaxable Income, for more
With Noncharitable Exempt that the attachments support. information.
Organizations ................................... 8 You may show money items as whole
dollars. To do so, drop any amount less than Part II—Compensation of the
General Instructions 50 cents and increase any amount from 50
through 99 cents to the next higher dollar.
Five Highest Paid Independent
Purpose of form. Schedule A (Form 990) is Contractors for Professional
used by section 501(c)(3), 501(e), 501(f), Services
501(k), and 501(n) organizations and section Part I—Compensation of the
4947(a)(1) nonexempt charitable trusts to Five Highest Paid Employees Complete Part II for the five highest paid
furnish additional information that is not Other Than Officers, Directors, independent contractors (whether individuals
required of other types of organizations that file or firms) who performed personal services of
Form 990, Return of Organization Exempt and Trustees a professional nature for the organization and,
From Income Tax, or Form 990-EZ, Short Complete Part I for the five employees with the in return, received over $50,000 for the year
Form Return of Organization Exempt From highest annual compensation over $50,000. from the organization. Examples of such
Income Tax. This additional information is Also enter the number of other employees with contractors include attorneys, accountants,
required by section 6033(b) and Rev. Proc. annual compensation over $50,000 who are doctors, and professional fundraisers. Also
75-50, 1975-2 C.B. 587. not individually listed in Part I. Do not include show the number of other independent
For purposes of these instructions, the term employees listed in Part V of Form 990 or in contractors who received more than $50,000
“section 501(c)(3)” includes organizations Part IV of Form 990-EZ (List of Officers, for the year for performing such services but
exempt under sections 501(e), 501(f), 501(k), Directors, Trustees, and Key Employees). who are not individually listed in Part II.
and 501(n). In columns (c) through (e), show all cash The organization may, at its discretion,
Who must file. An organization described in and noncash forms of compensation for each provide an attachment to explain the entire
section 501(c)(3) or a nonexempt charitable listed employee whether paid currently or 1998 compensation package for any person
trust described in section 4947(a)(1) must deferred. The organization may also provide listed in Part II.
complete and attach Schedule A (Form 990) to an attachment to explain the entire 1998 Fundraising fees exceeding $50,000 should
its Form 990 or Form 990-EZ. compensation package for any person listed in be reported in Part II, but not reimbursements
If an organization is not required to file Form Part I. for amounts paid by the fundraiser to others for
990, or Form 990-EZ, it is not required to file Column (c). Enter salary, fees, bonuses, and printing, paper, envelopes, postage, mailing list
Schedule A (Form 990). Do not use Schedule severance payments received by each listed rental, etc. Part II is intended for the fee portion
A (Form 990) if an organization is a private employee. Include current year payments of of payments to contractors, not for any
foundation. Instead, file Form 990-PF, Return amounts reported or reportable as deferred expense reimbursements.
of Private Foundation. compensation in any prior year.
Period covered. The organization's Schedule Column (d). Include in column (d) all forms Part III—Statements About
A (Form 990) should cover the same period as of deferred compensation and future severance Activities
the Form 990, or Form 990-EZ, with which it is payments (whether or not funded, whether or
filed. not vested, and whether or not the deferred Line 1. If you checked “Yes” on this line, you
Penalties. Schedule A (Form 990) is compensation plan is a qualified plan under must complete Part VI-A or VI-B and provide
considered a part of Form 990, or Form section 401(a)). Include in this column the required additional information; otherwise,
990-EZ, for section 501(c)(3) organizations and payments to welfare benefit plans on behalf of the return may be considered incomplete.
section 4947(a)(1) nonexempt charitable trusts the employee. Such plans provide benefits Substantial part test. In general, a section
that are required to file either form. Therefore, such as medical, dental, life insurance, 501(c)(3) organization may not devote a
any such organization that does not submit a severance pay, disability, etc. Reasonable “substantial part” of its activities to attempts to
completed Schedule A (Form 990) with its estimates may be used if precise cost figures influence legislation. Under the “substantial
are not readily available. part” test, if such an organization engages in

Cat. No. 11294Q

substantial lobbying activities, the organization Part IV—Reason for Non-Private not include the value of any exemption from
will lose both its tax-exempt status and its Federal, state, or local tax or any similar
ability to receive tax-deductible charitable Foundation Status benefit.
contributions. Except for churches, certain 3. “Indirect contributions from the general
church affiliated organizations, and private Definitions public” are what the organization receives from
foundations, an organization that loses its The following terms are used in more than one other organizations that receive a substantial
section 501(c)(3) status because it did not meet item in Part IV. The definitions given below part of their support from general public
the “substantial part” test will owe an excise tax generally apply. Note: Line references are to contributions. An example is the organization's
under section 4912 on all of its lobbying Parts IV and IV-A. share of the proceeds from an annual
expenditures. Managers of the organization community chest drive (such as the United
may also be jointly and severally liable for this 1. “Support”:
Way or United Fund). These are included on
tax. 1a. The term “support” (for lines 10, 11, and line 15.
Expenditure test. As an alternative to the 12), with certain qualified exceptions described
in 1b below, means all forms of support 4. A “disqualified person” is:
“substantial part” test, eligible public charities 4a. A “substantial contributor,” who is any
may elect the “expenditure test” of section including (but not limited to):
(i) Gifts, grants, contributions, membership person who gave an aggregate amount of more
501(h). The expenditure test generally permits than $5,000, if that amount is more than 2%
higher limits for lobbying expenditures than fees (lines 15 and 16);
of the total contributions the foundation or
allowed under the “substantial part” test. (ii) Net income from unrelated business organization received from its inception through
Electing public charities are subject to the activities, whether or not such activities are the end of the year in which that person's
lobbying expenditure definitions of section carried on regularly as a trade or business contributions were received. Gifts from the
4911, which are generally more liberal than the (lines 18 and 19); contributor's spouse are treated as gifts from
definitions under the “substantial part” test. (iii) Gross investment income, such as the contributor. Gifts are generally valued at fair
Section 4911 applies only to public charities interest, dividends, rents, and royalties (line market value as of the date the organization
that made a valid section 501(h) election by 18); received them.
filing Form 5768, Election/Revocation of (iv) Tax revenues levied for the benefit of In the case of a trust, the creator of the trust
Election by an Eligible Section 501(c)(3) an organization and either paid to or expended is considered a substantial contributor without
Organization To Make Expenditures To on behalf of such organization (line 20); and regard to the amount of contributions received
Influence Legislation. (v) The value of services or facilities by the trust from the creator and other persons.
Electing public charities. If the (exclusive of those generally furnished to the Any person who is a substantial contributor at
organization is an electing public charity, you public without charge) furnished by a any time generally remains a substantial
must complete Part VI-A of this form. governmental unit referred to in Code section contributor for all future periods even if later
Nonelecting public charities. If the 170(c)(1) to an organization without charge contributions by others push that person's
organization checked “Yes” but is not an (line 21). contributions below the 2% figure discussed
electing public charity, you must complete Part 1b. Support does not include the following: above.
VI-B and attach a statement giving a detailed Caution: Observe the Note in (i) below. 4b. An officer, director, or trustee of the
description of the organization's lobbying (i) Any amounts an organization receives organization or any individual having powers
activities. from the exercise or performance of its or responsibilities similar to those of officers,
Important: All charities, both electing and charitable, educational, or other purpose or directors, or trustees.
nonelecting, are absolutely prohibited from function constituting the basis for its exemption 4c. An owner of more than 20% of the voting
intervening in a political campaign for or (line 17). Note: For organizations that checked power of a corporation, profits interest of a
against any candidate for an elective public the box on line 12, the amounts on line 17 of partnership, or beneficial interest of a trust or
office. If a charity does intervene in a political the Support Schedule are included in support an unincorporated enterprise that is a
campaign, it will lose both its tax-exempt status for the purpose of both of the section 509(a)(2) substantial contributor to the organization.
and its eligibility to receive tax-deductible tests. 4d. A family member of an individual in the
charitable contributions. Also, both the (ii) Any gain upon the sale or exchange of first three categories. A “family member”
organization and its managers are subject to property which would be considered under any includes only a person's spouse, ancestors,
the tax on political expenditures under section section of the Code as gain from the sale or children, grandchildren, great grandchildren,
4955. exchange of a capital asset. and the spouses of children, grandchildren, and
Line 2. See Part IV, Definitions, for the (iii) Contributions of services for which a great grandchildren.
meaning of the term “members of their deduction is not allowable. 4e. A corporation, partnership, trust, or
families.” 2. “Support from a governmental unit,” with estate in which persons described in 4a, b, c,
Lines 2a through 2e apply to both sides of a certain exceptions described below, includes: or d above own more than 35% of the voting
listed transaction. Reporting is required, for 2a. Any amounts received from a power, profits interest, or beneficial interest.
example, whether the exempt organization is governmental unit, including donations or See section 4946(a)(1).
a payer or payee, buyer or seller, lender or contributions and amounts received in 5. An organization is considered “normally”
borrower. connection with a contract entered into with a to satisfy the public support test (for lines 10,
Line 2d. If the only compensation or governmental unit for the performance of 11, and 12 of the Support Schedule) for its
repayment relates to amounts the organization services or in connection with a government current tax year and the tax year immediately
reported in Part V of Form 990, or Part IV of research grant, provided these amounts are not following its current tax year, if the organization
Form 990-EZ, check “Yes” and write “See Part excluded from the term “support” as amounts satisfies the applicable support test for the 4
V, Form 990,” or “See Part IV of Form received from exercising or performing the tax years immediately before the current tax
990-EZ,” on the dotted line to the left of the organization's charitable purpose or function. year.
entry space. An amount paid by a governmental unit to If the organization has a material change
Line 4a. Indicate whether you have a section an organization is not treated as received from (other than from unusual grants—see
403(b) annuity program available for your exercising or performing its charitable, etc., instructions for line 28) in its sources of support
employees. purpose or function if the payment is to enable during the current tax year, the data ordinarily
Line 4b. The term “qualify” means that the organization to provide a service to, or required in the Support Schedule covering the
organizations or individuals will use the funds maintain a facility for, the direct benefit of the years 1994 through 1997 must be submitted for
the organization provides for charitable public, as for example, to maintain library the years 1994 through 1998. You must
purposes described in sections 170(c)(1) and facilities that are open to the public. prepare and attach a 5-year schedule using the
170(c)(2). 2b. Tax revenues levied for the same format as provided in the Support
The term “qualify” also means that individual organization's benefit and either paid to or Schedule for lines 15 through 28.
recipients belong to a charitable class and the expended on its behalf. Lines 5 through 14. Check one of the boxes
payments are to aid them. Examples include 2c. The value of services or facilities on these lines to indicate the reason the
helping the aged poor; training teachers and (exclusive of services or facilities generally organization is not a private foundation. The
social workers from underdeveloped countries; furnished, without charge, to the public) organization's exemption letter states the
and awarding scholarships to individuals. furnished by a governmental unit to the reason, or the local IRS office can tell you.
organization without charge; for example, a city Line 6. Check the box on line 6 for a school
pays the salaries of personnel to guard a whose primary function is the presentation of
museum, art gallery, etc., or provides the use formal instruction, and regularly has a faculty,
of a building rent free. However, the term does a curriculum, an enrolled body of students, and
a place where educational activities are
regularly conducted.

Page 2 Instructions for Schedule A (Form 990)

 A private school, in addition, must have a described below. The Support Schedule is Section 509(a)(1)/170(b)(1)(A)(vi) computation:
racially nondiscriminatory policy toward its completed for an organization that “normally” Line 26c Total support ................................ $600,000
students. For details about these requirements, (see Part IV, Definitions) receives at least
see the instructions for Part V. 331/3% of its support (excluding income Line 26d Less total of lines:
Line 7. Check the box on line 7 for an received in exercising its charitable, etc., 18 ......................... $300,000
organization whose main purpose is to provide function) from direct or indirect contributions 19 ......................... –0–
from the general public; from other publicly 22 ......................... –0–
hospital or medical care. A rehabilitation 26b ....................... 98,000 $398,000
institution or an outpatient clinic may qualify as supported (section 170(b)(1)(A)(vi))
a hospital, but the term does not include organizations; or from a governmental unit.
medical schools, medical research To determine whether the section Line 26e Total public support...................... $202,000
organizations, convalescent homes, homes for 509(a)(1)/170(b)(1)(A)(vi) test is met, donor Line 26f Public support percentage
the aged, or vocational training institutions for contributions are considered support from (line 26e divided by line 26c—
the handicapped. Also check the box on line 7 direct or indirect contributions from the general $202,000/$600,000) .................................. 33.67%
for a cooperative hospital service organization public only to the extent that the total amount Since X organization received more than
described in section 501(e). received from any one donor during the 331/3% of its total support for the period from
Line 9. Check the box on line 9 for a medical 4-tax-year period is 2% or less of the public sources, it qualifies as a section
research organization operated in connection organization's total support for those 4 tax 509(a)(1)/170(b)(1)(A)(vi) publicly supported
with or in conjunction with a hospital. The years as described below: organization. Note that if an organization fails
hospital must be described in section 501(c)(3) ● Any contribution by one individual will be the public support test for 2 consecutive years,
or operated by the Federal government, a state included in full in the total support it loses its public charity status and becomes
or its political subdivision, a U.S. possession denominator of the fraction determining the a private foundation.
or its political subdivision, or the District of 331/3%-of-support or the 10%-of-support
Columbia. limitation.
Facts and circumstances test. An
“Medical research” means studies and ● Only the portion of each donor's contribution
organization that does not qualify as publicly
experiments done to increase or verify that is 2% or less of the total support supported under the test described above may
information about physical or mental diseases denominator will be included in the numerator. be publicly supported on the basis of the facts
and disabilities and their causes, diagnosis, In applying the 2% limitation, all contributions in its case if it receives at least 10% of its
prevention, treatment, or control. The by any person(s) related to the donor as support from the general public. If you believe
organization must conduct the research directly described in section 4946(a)(1)(C) through (G) your organization is publicly supported
and continuously. If it primarily gives funds to (and related regulations) will be treated as if according to applicable regulations, attach a
other organizations (or grants and scholarships made by the donor. The 2% limitation does not detailed statement of the facts upon which you
to individuals) for them to do the research, the apply to support from governmental units base your conclusion.
organization is not a medical research referred to in section 170(c)(1), or to
contributions from publicly supported Line 12. Check the box on line 12 and
organization. complete the Support Schedule to determine
The organization is not required to be an organizations (section 170(b)(1)(A)(vi)), that
check the box on line 11a or 11b. whether an organization meets both of the
affiliate of the hospital, but there must be an following section 509(a)(2) support tests:
understanding that there will be close and Example. X organization reported the
1. The organization normally receives more
continuous cooperation in any joint-effort following amounts in its Support Schedule for
than one-third of its support for each tax year
medical research. the 4-year period 1994 through 1997:
from:
An organization qualifies as a medical Line (e) Total ● Persons other than disqualified persons (see
research organization if its principal purpose is Part IV, Definitions) with respect to the
medical research, and it devotes more than half 15 Gifts, grants & contributions................. $300,000
organization,
its assets, or spends at least 3.5% of the fair 17 Gross receipts from admissions, etc.... 100,000
● Governmental units (described in section
market value of its endowment, in conducting 18 Dividends & interest ............................. 300,000
medical research directly. Either test may be 170(c)(1)), or
24 Line 23 minus line 17........................... 600,000 ● Organizations described in section
met based on a computation period consisting
of the immediately preceding tax year or the 26a 2% of line 24 ........................................ 12,000 170(b)(1)(A) (other than in clauses (vii) and
immediately preceding 4 tax years. If an b Total of contributions exceeding the (viii)), and
organization does not satisfy either the “assets 2% limitation ......................................... 98,000 Such support is received by the organization
test” or the “expenditure test,” it may still qualify from any combination of:
as a medical research organization, based on The X organization determined whether or ● Gifts, grants, contributions, or membership
the circumstances involved. These tests are not it met the section 509(a)(1)/170(b)(1)(A)(vi)
fees, and
discussed in Regulations sections public support test as follows:
● Gross receipts from admissions, sales of
1.170A-9(c)(2)(v) and (vi). Value the Total support (line 24):................................. $600,000 merchandise, performance of services, or
organization's assets as of any day in its tax furnishing of facilities, in an activity that is not
year but use the same day every year. Value Direct contributions: an unrelated trade or business (within the
the endowment at fair market value, using meaning of section 513).
commonly accepted valuation methods. (See Total direct contributions from persons
Gross receipts, in any tax year, do not
Regulations section 20.2031.) who contributed less than 2% of total
support ......................................................... $50,000 include receipts from any person, bureau, or
Line 10. Check the box on line 10 and similar agency of a government unit (described
complete the Support Schedule if the Total direct contributions from in section 170(c)(1)) to the extent such receipts
organization receives and manages property six donors, each of whom gave exceed the greater of $5,000 or 1% of the
for and expends funds to benefit a college or more than 2% ($12,000) of total organization's support in such tax year.
university that is owned or operated by one or support ......................................................... 170,000
2. The organization normally receives not
more states or their political subdivisions. The more than one-third of its support each tax
Indirect contributions from
school must be as described in the first the general public: year from the sum of:
paragraph of the instructions for line 6. ● Gross investment income (as defined in
Expending funds to benefit a college or United Fund .............................................. 40,000 section 509(e)), and
university includes acquiring and maintaining ● The excess (if any) of the amount of the
the campus, its buildings, and its equipment, Grant from Y City ...................................... 40,000
unrelated business taxable income (as defined
granting scholarships and student loans, and
Total gifts, grants, & contributions ............... $300,000 in section 512) over the amount of the tax
making any other payments in connection with
the normal functions of colleges and imposed by section 511.
universities. Total direct contributions from six When determining whether an organization
The organization must meet essentially the donors, each of whom gave meets the gross investment income test of
same public support test described below for more than 2% of total support.. $170,000 section 509(a)(2)(B), amounts received from
line 11. See Rev. Rul. 82-132, 1982-2 C.B. 2% limitation for six donors: the following organizations retain the character
107. (2% × $600,000 × 6) ................ 72,000 of gross investment income (rather than gifts
or contributions) to the extent that these
Line 11. Check either box (but not both) on Less: Direct contributions in
98,000 organizations characterize the amounts as
line 11a or 11b and complete the Support excess of 2% of total support...
gross investment income:
Schedule to determine whether the Total public support ..................... $202,000 ● An organization that claims to be described
organization meets the section
509(a)(1)/170(b)(1)(A)(vi) public support test in section 509(a)(3) because it supports a
section 509(a)(2) organization; or

Instructions for Schedule A (Form 990) Page 3

● A charitable trust, corporation, fund, or total support from gross investment income and Line 17. Include income generated by the
association described in section 501(c)(3) net unrelated business taxable income. organization's exempt function activities
(including a nonexempt charitable trust Since T organization did not satisfy both of (charitable, educational, etc.) and by its
described in section 4947(a)(1)), that is the one-third tests of section 509(a)(2), it failed nontaxable fundraising events (excluding any
required to distribute, or normally distributes, the section 509(a)(2) public support test for this contributions received, reported on line 15).
at least 25% of its adjusted net income (within year. An organization that fails the public Examples of such income include the income
the meaning of section 4942(f)) to a section support test for 2 consecutive years loses its derived by a symphony orchestra from the sale
509(a)(2) organization, if the distribution public charity status and becomes a private of tickets to its performances; and raffles,
normally comprises at least 5% of the foundation. bingo, or other fundraising-event income that
distributee organization's adjusted net income. Line 13. Check the box on line 13 and is not taxable as unrelated business income
If an organization receives an amount from complete columns (a) and (b) for a supporting because substantially all the work is performed
a split-interest trust described in section organization operated only for the benefit of without compensation, or carried on by the
4947(a)(2) that is required to distribute, or and in connection with organizations listed in organization primarily for the convenience of its
normally distributes, at least 25% of its lines 5 through 12, or with organizations members, or the event consists of the selling
adjusted net income to a section 509(a)(2) described in section 501(c)(4), (5), or (6) that of merchandise, substantially all of which has
organization, and the distribution normally meet the tests of section 509(a)(2) (described been received by the organization as gifts or
comprises at least 5% of the distributee in line 12). General principles governing contributions (section 513(a)(1), (2), or (3)).
organization's adjusted net income, the amount supporting organizations are described in Line 28. Unusual grants generally are
retains the character of gross investment Regulations section 1.509(a)-4. substantial contributions and bequests from
income if it would be characterized as gross For column (b), identify the organization disinterested persons and:
investment income attributable to transfers in supported if it is included in lines 5 through 12. 1. Are attracted because of the
trust after May 26, 1969, if the trust were a For example, if your organization supported a organization's publicly supported nature,
private foundation. hospital, enter “7” in column (b). 2. Are unusual and unexpected because
All income characterized as gross Line 14. Check the box on line 14 only if the of the amount, and
investment income in the possession of the organization has received a ruling from the IRS 3. Are large enough to endanger the
distributing organization is considered to be that it is organized and operated primarily to organization's status as normally meeting the
distributed first by the organization and keeps test for public safety. support test described in the instructions for
its character as such in the possession of the lines 10, 11, and 12.
recipient.
For more details, see Regulations section Part IV-A—Support Schedule A grant that meets these terms may be
treated as an unusual grant (that is disregarded
1.509(a)-5 that covers special rules of Complete the Support Schedule if a box on line entirely in the public support computation) even
attribution. 10, 11, or 12 was checked. if the organization receives the funds over a
If the organization received any amounts Note: The Support Schedule must be period of years. In the list of unusual grants,
from either kind of organization above, attach completed on the cash method of accounting. show only what the organization received
a statement. Show the amounts received from For example, if a grantor makes a grant to an during the year.
each organization, including amounts, such as organization payable over a term of years, such Do not treat gross investment income items
gifts, that are not investment income. grant will be includible in the support fraction as unusual grants. Instead, include all
Example. T organization reported the of the grantee organization only when and to investment income in support.
following amounts in its Support Schedule for the extent amounts payable under the grant are See Regulations sections 1.170A-9(e)(6)(ii)
the 4-year period 1994 through 1997: received by the grantee. and 1.509(a)-3(c)(3) and (4) for details about
Line (e) Total If the organization uses the accrual method unusual grants.
of accounting, a worksheet such as the one
15 Gifts, grants & contributions................. $45,000 that follows may be used to convert any
16 Membership fees.................................. 50,000 revenue account from an accrual basis to a
Part V—Private School
17 Gross receipts from admissions, cash basis. Questionnaire
merchandise, etc. ................................. 25,000 All schools that checked the box on line 6, Part
1. Revenue per books (accrual basis) ...
18 Gross income from interest, dividends, IV, must complete Part V. Relevant parts of
etc. ........................................................ 80,000 2. Add:
Rev. Proc. 75-50, 1975-2 C.B. 587 are given
23 Total of lines 15 through 22 ................. $200,000 a. Beginning-of-year entry (if any) below. The revenue procedure gives guidelines
reversing accrual of income at the and recordkeeping requirements for
27a Gifts from disqualified persons............. $25,000 end of the prior year; and...................
determining whether private schools that are
b Excess gross receipts from b. Any amounts collected during the recognized as exempt from tax have racially
nondisqualified persons........................ $20,000 year that were not credited to the nondiscriminatory policies toward their
revenue account in the current year ..
T organization determined whether or not it students.
met the one-third tests of section 509(a)(2) in 3. Subtotal............................................... 4.01 Organizational requirements. A
the following computation: 4. Less: school must include a statement in its charter,
Income accrued during the current bylaws, or other governing instrument, or in a
Section 509(a)(2) computation: year but not collected as of the end resolution of its governing body, that it has a
Line of the year .......................................... racially nondiscriminatory policy as to students
27c Add: Amounts from column (e), 5. Revenue on a cash basis................... and therefore does not discriminate against
lines 15, 16, 17, 20, and 21 ................. $120,000 applicants and students on the basis of race,
If the organization has not existed during the color, and national or ethnic origin.
27d Total of line 27a................... $25,000 whole period the Support Schedule covers, fill 4.02 Statement of policy. Every school
Total of line 27b................... 20,000 45,000 in the information for the years that apply. If the must include a statement of its racially
organization's status is based on years not nondiscriminatory policy as to students in all its
shown in the Support Schedule, attach an brochures and catalogues dealing with student
27e Public support (line 27c minus
line 27d total) $75,000 additional schedule for the other years. admissions, programs, and scholarships. A
Lines 15, 16, 17, 26, and 27. See Part IV, statement substantially similar to the Notice
27f Total support (line 23,
column (e))........................... $200,000 Definitions, and Regulations section described in paragraph (a) of subsection 1 of
1.509(a)-3: section 4.03, infra, will be acceptable for this
27g Public support percentage
(line 27e divided by line 27f— 1. To distinguish gross receipts from gifts purpose. Further, every school must include a
$75,000/$200,000) 37.50% and contributions, grants, and gross investment reference to its racially nondiscriminatory policy
income, and in other written advertising that it uses as a
27h Investment income percentage
(line 18 divided by line 27f— 2. For the definition of membership fees means of informing prospective students of its
$80,000/$200,000) 40.0% and a bureau or similar agency of a programs. The following references will be
governmental unit. acceptable:
T organization received 37.50% of its total Note: Organizations completing line 26 should The (name) school admits students of any
support from the public and thus met the note the instructions and examples for lines 10 race, color, and national or ethnic origin.
more-than-one-third test of public support to or 11 regarding the public support test 4.03 Publicity. The school must make its
total support. T organization's investment applicable to their type of organization. racially nondiscriminatory policy known to all
income percentage was 40.0%. Therefore, it Organizations completing line 27 should note segments of the general community served by
did not meet the second part of the section the instructions and examples for line 12 for the school.
509(a)(2) test—the not-more-than-one-third of guidance in computing their public support test.

Page 4 Instructions for Schedule A (Form 990)

 1. The school must use one of the following denomination or unit utilizes in the communities with subsection 1 of this section was justified
two methods to satisfy this requirement: from which the students are drawn. These by the application to it of paragraph (a), (b), or
(a) The school may publish a notice of its newspapers and circulars may be those (c) of subsection 2. Further, a school must be
racially nondiscriminatory policy in a distributed by a particular religious prepared to demonstrate that it has publicly
newspaper of general circulation that serves denomination or unit or by an association that disavowed or repudiated any statements
all racial segments of the community. This represents a number of religious organizations purported to have been made on its behalf
publication must be repeated at least once of the same denomination. If, however, the (after November 6, 1975) that are contrary to
annually during the period of the school's school advertises in newspapers of general its publicity of a racially nondiscriminatory
solicitation for students or, in the absence of a circulation in the community or communities policy as to students, to the extent that the
solicitation program, during the school's from which its students are drawn and school or its principal official were aware of
registration period. Where more than one paragraphs (b) and (c) of this subsection are such statements.
community is served by a school, the school not applicable to it, then it must comply with 4.04 Facilities and programs. A school
may publish its notice in those newspapers that paragraph (a) of subsection 1 of this section. must be able to show that all of its programs
are reasonably likely to be read by all racial (b) If a school customarily draws a and facilities are operated in a racially
segments of the communities that it serves. substantial percentage of its students nondiscriminatory manner.
The notice must appear in a section of the nationwide or world-wide or from a large 4.05 Scholarship and loan programs. As
newspaper likely to be read by prospective geographic section or sections of the United a general rule, all scholarship or other
students and their families and it must occupy States and follows a racially nondiscriminatory comparable benefits procurable for use at any
at least three column inches. It must be policy as to students, the publicity requirement given school must be offered on a racially
captioned in at least 12 point boldface type as may be satisfied by complying with section nondiscriminatory basis. Their availability on
a notice of nondiscriminatory policy as to 4.02, supra. Such a school may demonstrate this basis must be known throughout the
students, and its text must be printed in at least that it follows a racially nondiscriminatory policy general community being served by the school
8 point type. The following notice will be within the meaning of the preceding sentence and should be referred to in the publicity
acceptable: either by showing that it currently enrolls required by this section in order for that school
students of racial minority groups in meaningful to be considered racially nondiscriminatory as
numbers or, when minority students are not to students. . . . [S]cholarships and loans that
enrolled in meaningful numbers, that its
Notice Of Nondiscriminatory promotional activities and recruiting efforts in
are made pursuant to financial assistance
programs favoring members of one or more
Policy As To Students each geographic area were reasonably racial minority groups that are designed to
designed to inform students of all racial promote a school's racially nondiscriminatory
segments in the general communities within the policy will not adversely affect the school's
The (name) school admits students of any
area of the availability of the school. The exempt status. Financial assistance programs
race, color, national and ethnic origin to all the
question whether a school satisfies the favoring members of one or more racial groups
rights, privileges, programs, and activities
preceding sentence will be determined on the that do not significantly derogate from the
generally accorded or made available to
basis of the facts and circumstances of each school's racially nondiscriminatory policy
students at the school. It does not discriminate
case. similarly will not adversely affect the school's
on the basis of race, color, national and ethnic
origin in administration of its educational (c) If a school customarily draws its students exempt status.
policies, admissions policies, scholarship and from local communities and follows a racially 4.06 Certification. An individual authorized
loan programs, and athletic and other nondiscriminatory policy as to students, the to take official action on behalf of a school that
school-administered programs. publicity requirement may be satisfied by claims to be racially nondiscriminatory as to
complying with section 4.02, supra. Such a students is required to certify annually, under
(b) The school may use the broadcast media school may demonstrate that it follows a penalties of perjury, that to the best of his or
to publicize its racially nondiscriminatory policy racially nondiscriminatory policy within the her knowledge and belief the school has
if this use makes such nondiscriminatory policy meaning of the preceding sentence by showing satisfied the applicable requirements of
known to all segments of the general that it currently enrolls students of racial sections 4.01 through 4.05 of the Rev. Proc.
community the school serves. If this method is minority groups in meaningful numbers. The This certification is line 35 in Part V.
chosen, the school must provide question whether a school satisfies the 4.07 Faculty and staff. The existence of a
documentation that the means by which this preceding sentence will be determined on the racially discriminatory policy with respect to
policy was communicated to all segments of basis of the facts and circumstances of each employment of faculty and administrative staff
the general community was reasonably case. One of the facts and circumstances that is indicative of a racially discriminatory policy
expected to be effective. In this case, the Service will consider is whether the as to students. Conversely, the absence of
appropriate documentation would include school's promotional activities and recruiting racial discrimination in employment of faculty
copies of the tapes or script used and records efforts in each area were reasonably designed and administrative staff is indicative of a racially
showing that there was an adequate number to inform students of all racial segments in the nondiscriminatory policy as to students.
of announcements, that they were made during general communities within the area of the
hours when the announcements were likely to availability of the school. The Service 7.01 Specific records. Except as provided
be communicated to all segments of the recognizes that the failure by a school drawing in section 7.03, each exempt private school
general community, that they were of sufficient its students from local communities to enroll must maintain for a minimum period of three
duration to convey the message clearly, and racial minority group students may not years, beginning with the year after the year
that they were broadcast on radio or television necessarily indicate the absence of a racially of compilation or acquisition, the following
stations likely to be listened to by substantial nondiscriminatory policy as to students when records for the use of the Service on proper
numbers of members of all racial segments of there are relatively few or no such students in request:
the general community. Announcements must these communities. Actual enrollment is, 1. Records indicating the racial
be made during the period of the school's however, a meaningful indication of a racially composition of the student body, faculty, and
solicitation for students or, in the absence of a nondiscriminatory policy in a community in administrative staff for each academic year.
solicitation program, during the school's which a public school or schools became 2. Records sufficient to document that
registration period. subject to a desegregation order of a federal scholarship and other financial assistance is
Communication of a racially court or otherwise expressly became obligated awarded on a racially nondiscriminatory basis.
nondiscriminatory policy as to students by a to implement a desegregation plan under the 3. Copies of all brochures, catalogues, and
school to leaders of racial groups as the sole terms of any written contract or other advertising dealing with student admissions,
means of publicity generally will not be commitment to which any Federal agency was programs, and scholarships. Schools
considered effective to make the policy known a party. advertising nationally or in a large geographic
to all segments of the community. The Service encourages schools to satisfy segment or segments of the United States
2. The requirements of subsection 1 of this the publicity requirement by the methods need only maintain a record sufficient to
section will not apply when one of the following described in subsection 1 of this section, indicate when and in what publications their
paragraphs applies: regardless of whether a school considers itself advertisements were placed.
(a) If for the preceding 3 years the within subsection 2, because it believes these 4. Copies of all materials used by or on
enrollment of a parochial or other methods to be the most effective to make behalf of the school to solicit contributions.
church-related school consists of students at known a school's racially nondiscriminatory 7.02 Limitation.
least 75% of whom are members of the policy. In this regard it is each school's 1. For purposes of section 7.01, the racial
sponsoring religious denomination or unit, the responsibility to determine whether paragraph composition of the student body, faculty, and
school may make known its racially (a), (b), or (c) of subsection 2 applies to it. On administrative staff may be an estimate based
nondiscriminatory policy in whatever audit, a school must be prepared to on the best information readily available to the
newspapers or circulars the religious demonstrate that the failure to publish its school, without requiring student applicants,
racially nondiscriminatory policy in accordance
Instructions for Schedule A (Form 990) Page 5
students, faculty, or administrative staff to national or international amateur sports legislation, being the recipient's representative
submit information to the school that the school competition (not including providing athletic in the legislature, or being a member of the
otherwise does not require. For each academic facilities or equipment, other than by qualified legislative committee that will consider the
year, however, a record of the method by which amateur sports organizations described in legislation.
racial composition is determined must be section 501(j)(2)), Also, a communication described in (4)
maintained. . . . 2. The allocable portion of administrative above generally is grassroots lobbying only if,
2. The Service does not require that a expenses paid or incurred for the above in addition to referring to and reflecting a view
school release personally identifiable records purposes, on specific legislation, it is a communication
or personal information contained therein 3. Amounts paid or incurred to try to that cannot meet the “full and fair exposition”
except in accordance with the requirements of influence legislation, whether or not for the test as nonpartisan analysis, study, or
the "Family Educational Rights and Privacy Act purposes described in 1 above, research.
of 1974," 20 U.S.C. section 1232g (1974). 4. Allowance for depreciation or Communication with members. For
Similarly, the Service does not require a school amortization, and purposes of section 4911, expenditures for
to keep records the maintenance of which is 5. Fundraising expenditures, except that certain communications between an
prohibited under state or federal law. exempt purpose expenditures do not include organization and its members are treated more
7.03 Exceptions. The records described in amounts paid to or incurred for either the leniently than are communications to
section 7.01 need not be independently organization's separate fundraising unit or nonmembers. Expenditures for a
maintained for Internal Revenue Service use if other organizations, if the amounts are communication that refers to, and reflects a
1. Substantially the same information that primarily for fundraising. view on, specific legislation are not lobbying
each of these records would provide has been See also Regulations section 56.4911-4(c) expenditures if the communication satisfies the
included in a report or reports filed in for a discussion of excluded expenditures. following requirements:
accordance with law with an agency or Lobbying expenditures. The term “lobbying 1. The communication is directed only to
agencies of Federal, state, or local expenditures” means expenditures paid or members of the organization,
government, and this information is current incurred for the purpose of attempting to 2. The specific legislation the
within one year, and influence legislation: communication refers to, and reflects a view
2. The school maintains copies of these ● Through communication with any member
on, is of direct interest to the organization and
reports from which this information is readily or employee of a legislative body, or with any its members,
obtainable. Records described in section 7.01 government official or employee who may 3. The communication does not directly
providing information not included in reports participate in the formulation of the legislation, encourage the member to engage in direct
filed with an agency or agencies must be and lobbying (whether individually or through the
maintained by the school for Service use. organization), and
● By attempting to affect the opinions of the
7.04 Failure to maintain records. Failure general public. 4. The communication does not directly
to maintain or to produce upon the proper encourage the member to engage in grassroots
request the required records and information To determine if an organization has spent
excessive amounts on lobbying, you must lobbying (whether individually or through the
will create a presumption that the organization organization).
has failed to comply with these guidelines. know which expenditures are lobbying
expenditures and which are not lobbying Expenditures for a communication directed
expenditures. An electing public charity's only to members that refers to, and reflects a
Part VI-A—Lobbying lobbying expenditures for a year are the sum view on, specific legislation and that satisfies
the requirements of paragraphs 1, 2, and 4, but
Expenditures by Electing Public of its expenditures during that year for (1) direct
does not satisfy the requirements of paragraph
lobbying communications (“direct lobbying
Charities expenditures”) plus (2) grassroots lobbying 3, are treated as expenditures for direct
Complete Part VI-A only for an eligible communications (“grassroots expenditures”). lobbying.
organization that elected to be subject to the Direct lobbying communications (“direct Expenditures for a communication directed
lobbying expenditure limitations of section lobbying expenditures”). A direct lobbying only to members that refers to, and reflects a
501(h) by filing Form 5768 and for which the communication is any attempt to influence any view on, specific legislation and satisfies the
election was valid and in effect for its tax year legislation through communication with: requirements of paragraphs 1 and 2, but does
beginning in 1998. ● Any member or employee of a legislative
not satisfy the requirements of paragraph 4, are
A public charity that makes a valid section treated as grassroots expenditures, whether or
body, or
501(h) election may spend up to a certain not the communication satisfies the
● Any government official or employee (other
percentage of its “exempt purpose requirements of paragraph 3.
than a member or employee of a legislative
expenditures” to influence legislation without See Regulations section 56.4911-5 for
body) who may participate in the formulation
incurring tax or losing its tax-exempt status. details.
of the legislation, but only if the principal
Under the “expenditure test,” there are limits purpose of the communication is to influence There are special rules regarding certain
both upon the amount of the organization's legislation. paid mass media advertisements about highly
grassroots lobbying expenditures and upon the publicized legislation; allocation of mixed
A communication with a legislator or
total amount of its direct lobbying and purpose expenditures; certain transfers treated
government official will be treated as a direct
grassroots lobbying expenditures. If the as lobbying expenditures and special rules
lobbying communication, if, but only if, the
electing public charity does not meet this regarding lobbying on referenda, ballot
communication:
“expenditure test,” it will owe a section 4911 initiatives, and similar procedures (see
● Refers to specific legislation, and
excise tax on its excess lobbying expenditures. Regulations sections 56.4911-2 and -3).
● Reflects a view on such legislation.
Moreover, if over a 4-year averaging period the Legislation. In general, the term “legislation”
organization's average annual total lobbying or Grassroots lobbying communications includes Acts, bills, resolutions, or similar
grassroots lobbying expenditures are more (“grassroots expenditures”). A grassroots items. “Specific legislation” includes both
than 150% of its dollar limits, the organization lobbying communication is any attempt to legislation that has already been introduced in
will lose its exempt status. influence any legislation through an attempt to a legislative body and a specific legislative
The following terms are used in Part VI-A. affect the opinions of the general public or any proposal that the organization either supports
See Regulations section 56.4911 for details. part of the general public. or opposes.
Exempt purpose expenditures. The amount A communication is generally not a Exceptions to the definitions of direct
an electing public charity may spend on grassroots lobbying communication unless (in lobbying communication and/or grassroots
lobbying (without incurring tax) is a scaled addition to referring to specific legislation and lobbying communication. In general,
percentage of the organization's exempt reflecting a view on that legislation) it engaging in nonpartisan analysis, study, or
purpose expenditures. In general, an encourages recipients to take action about the research and making its results available to the
expenditure is an exempt purpose expenditure specific legislation. general public or segment or members thereof,
if it is paid or incurred by an electing public A communication encourages a recipient to or to governmental bodies, officials, or
charity to accomplish the organization's exempt take action when it: (1) states that the recipient employees is not considered either a direct
purpose. should contact legislators; (2) states a lobbying communication or a grassroots
In general, exempt purpose expenditures legislator's address, phone number, etc.; (3) lobbying communication. Nonpartisan analysis,
are: provides a petition, tear-off postcard, or similar study, or research may advocate a particular
1. The total amount paid or incurred for material for the recipient to send to a legislator; position or viewpoint as long as there is a
religious, charitable, scientific, literary, or or (4) specifically identifies one or more sufficiently full and fair exposition of the
educational purposes, or for the prevention of legislators who will vote on legislation as pertinent facts to enable the public or an
cruelty to children or animals, or to foster opposing the communication's view on the individual to form an independent opinion or
legislation, being undecided about the conclusion.

Page 6 Instructions for Schedule A (Form 990)

 A communication that responds to a Limited control. If two organizations are Any organization for which a lobbying
governmental body's or committee's written affiliated because their governing instruments expenditure election under section 501(h) was
request for technical advice is not a direct provide that the decisions of one will control the in effect for its tax year beginning in 1998 must
lobbying communication. other only on national legislation, apply complete columns (a) through (e) of lines 45
A communication is not a direct lobbying expenditures as follows: through 50 except in the following situations:
communication if the communication is an 1. Charge the controlling organization with 1. An organization first treated as a section
appearance before, or communication with, its own lobbying expenditures and the national 501(c)(3) organization in its tax year beginning
any legislative body whose action might affect legislation expenditures of the affiliated in 1998 does not have to complete any part of
the organization's existence, its powers and organizations. lines 45 through 50.
duties, its tax-exempt status, or the deductibility 2. Do not charge the controlling 2. An organization does not have to
of contributions to the organization, as opposed organization with other lobbying expenditures complete lines 45 through 50 for any period
to affecting merely the scope of the (or other exempt-purpose expenditures) of the before it is first treated as a section 501(c)(3)
organization's future activities. affiliated organizations. organization.
Affiliated groups. Treat members of an 3. Treat each local organization as though 3. If 1998 is the first year for which an
affiliated group as a single organization to it were not a member of an affiliated group; i.e., organization's first section 501(h) election is
measure lobbying expenditures and permitted the local organization should account for its effective, that organization must complete line
lobbying expenditures. own expenditures only and not any of the 45, columns (a) and (e).
Two organizations are affiliated if one is national legislation expenditures deemed as 4. The organization must then complete all
bound by the other organization's decisions on incurred by the controlling organization in 1 of column (e) to determine whether the amount
legislative issues (control) or if enough above. on line 47, column (e), is equal to or less than
representatives of one belong to the other When this type of limited control is present, the lobbying ceiling amount calculated on line
organization's governing board to cause or each member of the affiliated group should 46 and whether the amount on line 50 is equal
prevent action on legislative issues complete column (b) only. to or less than the grassroots ceiling amount
(interlocking directorate). Group returns. Although membership in a calculated on line 49.
If you are not sure whether your group is group affiliated for lobbying does not establish 5. The organization does not satisfy both
affiliated, you may ask the IRS for a ruling eligibility to file a group return, a group return tests if either its total lobbying expenditures or
letter. Send the request to: Assistant can sometimes meet the filing requirements of grassroots lobbying expenditures exceed the
Commissioner (Employee Plans and Exempt more than one member of an affiliated group. applicable ceiling amounts. When this occurs,
Organizations), Exempt Organizations (General Instruction R of the Instructions for all five columns must be completed and a
Technical Division, CP:E:EO, 1111 Constitution Form 990 and Form 990-EZ explains who may recomputation made unless exception 1 or 2
Ave., NW, Washington, DC 20224. There is a file a group return.) above applies.
fee for this ruling. If a central or parent organization files a 6. If 1998 is the second or third tax year for
Members of an affiliated group measure group return on behalf of two or more members which the organization's first section 501(h)
both lobbying expenditures and permitted of the group, complete column (a), Part VI-A, election is in effect, that organization is
lobbying expenditures on the basis of the for the affiliated group as a whole. Include the required to complete only the columns for the
affiliated group's tax year. If all members of the central, electing, and nonelecting members. years in which the election has been in effect,
affiliated group have the same tax year, that In column (b), except on lines 43 and 44, entering the totals for those years in column
year is the tax year of the affiliated group. include the amounts that apply to all electing (e).
However, if the affiliated group's members members of the group if they are included in 7. The organization must determine, for
have different tax years, the tax year of the the group return. those 2 or 3 years, whether the amount entered
affiliated group is the calendar year, unless all Attach the schedule described above under in column (e), line 47, is equal to or less than
the members of the group elect otherwise. See Affiliated groups. Show what amounts apply the lobbying ceiling amount reported on line 46,
Regulations section 56.4911-7(e)(3). to each group member. and whether the amount entered in column (e),
If the electing organization belongs to an If the group return includes organizations line 50, is equal to or less than the grassroots
affiliated group, complete in Part VI-A, lines 36 that belong to more than one affiliated group, ceiling amount calculated on line 49.
through 44: show in column (a) the totals for all such 8. The organization does not satisfy both
● Column (a) for the affiliated group as a
groups. On the attached schedule, show the tests if either its total lobbying expenditures or
whole, and amounts that apply to each affiliated group and grassroots lobbying expenditures exceed
● Column (b) for the electing member of the to each group member. applicable ceiling amounts. When that occurs,
group, If the parent organization has made the all five columns must be completed and a
If there are no excess lobbying expenditures lobbying expenditure election, its separate recomputation made, unless exception 1 or 2
on either line 43 or 44 of column (a), treat each return must also show in column (a) the above applies.
electing member as having no excess lobbying amounts that apply to the affiliated group as a If the organization is not required to
expenditures. whole and, in column (b), the amounts that complete all five columns, attach a statement
However, if there are excess lobbying apply to the parent organization only. explaining why. In the statement, show the
expenditures on either line 43 or 44 of column A subordinate organization not included in ending date of the tax year in which the
(a), treat each electing member as having the group return would also complete column organization made its first section 501(h)
excess lobbying expenditures. In such case, (a) for the affiliated group as a whole and election and state whether or not that first
each electing member must file Form 4720, column (b) for itself only. election was revoked before the start of the
Return of Certain Excise Taxes on Charities organization's tax year that began in 1998.
However, if “limited control” (defined above)
and Other Persons Under Chapters 41 and 42 exists, complete only column (b) in Part VI-A Note: If the organization belongs to an
of the Internal Revenue Code and must pay the of the group return for the electing members in
affiliated group, enter the appropriate affiliated
tax on its proportionate share of the affiliated the group.
group totals from column (a), lines 36 through
group's excess lobbying expenditures. 44, when completing lines 45, 47, 48, and 50.
Attach a schedule to show the amounts that
To find a member's proportionate share, see apply to each electing member. Line 45. Lobbying nontaxable amount.
Regulations section 56.4911-8(d). Enter the For 1995 through 1998, enter the amount from
In the separate returns filed by the parent line 41 of the Schedule A (Form 990) filed for
proportionate share in column (b) on line 43 or and by any subordinate organizations not
line 44, or on both lines. each year.
included in the group return, complete only
Attached schedule. Attach a schedule column (b). Line 47. Total lobbying expenditures. For
showing each affiliated group member's name, 1995 through 1998, enter the amount from line
Lines 36 through 44. Complete column (b) 38 of the Schedule A (Form 990) filed for each
address, EIN, and expenses. Use the format for any organization using Part VI-A but
of Part VI-A for this schedule. Show which year.
complete column (a) only for affiliated groups.
members elected and which did not. Line 48. Grassroots nontaxable amount.
Use lines 36 through 44 to determine For 1995 through 1998, enter the amount from
Include each electing member's share of the whether any of the organization's current year
excess lobbying expenditures on the attached line 42 of the Schedule A (Form 990) filed for
lobbying expenditures are subject to tax. File each year.
schedule. Nonelecting members do not owe Form 4720 if you need to report and pay the
tax, but remain subject to the general rule, excise tax. Line 50. Grassroots lobbying
which provides that no substantial part of their expenditures. For 1995 through 1998, enter
activities may consist of carrying on Lines 45 through 50. Lines 45 through 50 the amount from line 36 of the Schedule A
propaganda or otherwise trying to influence are used to determine if the organization (Form 990) filed for each year.
legislation. exceeded lobbying expenditure limits during
the 4-year averaging period.

Instructions for Schedule A (Form 990) Page 7

Part VI-B—Lobbying Activity by 1. The two organizations share no element Answer “Yes” for any transaction, including
of common control and transfers for adequate consideration, between
Nonelecting Public Charities 2. A historic and continuing relationship the reporting organization and an unrelated
The Part VI-A instructions defining direct and does not exist between the two organizations. noncharitable exempt organization if the
grassroots lobbying activities by organizations An “element of common control” is present amount involved is more than $500. The
that made the section 501(h) election do not when one or more of the officers, directors, or “amount involved” is the fair market value of the
apply to nonelecting organizations that trustees of one organization are elected or goods, services, or other assets furnished by
complete Part VI-B. appointed by the officers, directors, trustees, the reporting organization.
Part VI-B provides a reporting format for any or members of the other. An element of Exception. If a transaction with an unrelated
organization that engaged in lobbying activities common control is also present when more noncharitable exempt organization was for
in its 1998 tax year but did not make a section than 25% of the officers, directors, or trustees adequate consideration and the amount
501(h) lobbying expenditure election for that of one organization serve as officers, directors, involved was $500 or less, it is not necessary
year by filing Form 5768. or trustees of the other organization. to answer “Yes” for that transaction.
A nonelecting public charity will generally be A “historic and continuing relationship” exists Line 51b(iii). Answer “Yes” for transactions in
regarded as lobbying if the organization either: when two organizations participate in a joint which the reporting organization was either the
(1) contacts, or urges the public to contact, effort to work in concert toward the attainment lessor or the lessee.
members of a legislative body for the purpose of one or more common purposes on a Line 51b(iv). Answer “Yes” if either
of proposing, supporting, or opposing continuous or recurring basis rather than on the organization reimbursed expenses incurred by
legislation or the government's budget process; basis of one or several isolated transactions the other.
or (2) advocates the adoption or rejection of or activities. Such a relationship also exists Line 51b(v). Answer “Yes” if either
legislation. when two organizations share facilities, organization made loans to the other or if the
Nonelecting organizations must complete equipment, or paid personnel during the year, reporting organization guaranteed the other's
Part VI-B to show lobbying expenditures paid regardless of the length of time the loans.
or incurred. arrangement is in effect. Line 51b(vi). Answer “Yes” if either
Note: In item g, “direct contact” means a Line 51. Reporting of certain transfers and organization performed services or
personal telephone call or visit with legislators, transactions. Except as provided below, membership or fundraising solicitations for the
their staffs, or government officials. report on line 51 any transfer to or transaction other.
These nonelecting organizations must also with a noncharitable exempt organization even Line 51c. Complete line 51c regardless of
attach a statement giving a detailed description if the transfer or transaction constitutes the only whether the noncharitable exempt organization
of their lobbying activities. The detailed connection with the noncharitable exempt is related to or closely affiliated with the
description of lobbying activities should include organization. reporting organization. For the purposes of this
all lobbying activities, whether expenses are Related organizations. If the noncharitable line, “facilities” includes office space and any
incurred or not (e.g., even lobbying activities exempt organization is related to or affiliated other land, building, or structure whether
carried out by unreimbursed volunteers). with the reporting organization, report all direct owned or leased by, or provided free of charge
For example, the activities should be and indirect transfers and transactions except to, the reporting organization or the
included in the attached statement if an for contributions and grants received by the noncharitable exempt organization.
organization (either through its employees or reporting organization. Line 51d. Use this schedule to describe the
volunteers) attempts to influence legislation in Unrelated organizations. All transfers from transfers and transactions for which you
any of the following ways: the reporting organization to an unrelated entered “Yes” on lines 51a through 51c above.
Sending letters or publications to noncharitable exempt organization must be You must describe each transfer or transaction
government officials or legislators; meeting with reported on line 51a. All transactions between for which you answered “Yes.” You may
or calling government officials or legislators; the reporting organization and an unrelated combine all of the cash transfers (line 51a(i))
sending or distributing letters or publications noncharitable exempt organization must be to each organization into a single entry.
(including newsletters, brochures, etc.) to shown on line 51b unless they meet the Otherwise, make a separate entry for each
members or to the general public; using direct exception in the specific instructions for that transfer or transaction.
mail, placing advertisements, issuing press line. Column (a). For each entry, enter the line
releases, holding news conferences; or holding Line 51a. Transfers. Answer “Yes” to lines number from lines 51a through 51c. For
rallies or demonstrations. 51a(i) and 51a(ii) if the reporting organization example, if you answered “Yes” to line 51b(iii),
made any direct or indirect transfers of any enter “b(iii)” in column (a).
value to a noncharitable exempt organization.
Part VII—Information Regarding A “transfer” is any transaction or
Column (d). If you need more space, write
“see attached” in column (d) and use an
Transfers To and Transactions arrangement whereby one organization attached sheet for your description. If you are
and Relationships With transfers something of value (cash, other making more than one entry on line 51d,
assets, services, use of property, etc.) to specify, on the attached sheet, which transfer
Noncharitable Exempt another organization without receiving or transaction you are describing.
Organizations something of more than nominal value in Line 52. Reporting of certain relationships.
return. Contributions, gifts, and grants are Enter on line 52 each noncharitable exempt
Part VII is used to report on:
examples of transfers. organization to or with which the reporting
● Direct and indirect transfers to (line 51a),
If the only transfers between the two organization is related, or affiliated, as defined
● Direct and indirect transactions with (line
organizations were contributions and grants above. If the control factor or the historic and
51b), made by the noncharitable exempt
● Relationships with (line 52)
continuing relationship factor (or both) is
organization to the reporting organization, present at any time during the year, you must
any other noncharitable exempt organization answer “No.” identify the organization on line 52 even if
(section 6033(b)(9)). Line 51b. Other transactions. Answer “Yes” neither factor is present at the end of the year.
A “noncharitable exempt organization” is an for any transaction described in lines 51b(i) Do not enter unrelated noncharitable exempt
organization exempt under section 501(c) (that through (vi), regardless of its amount, if it is organizations on line 52 even if you report
is not exempt under section 501(c)(3)), or a with a related or affiliated organization. transfers to or transactions with those
political organization described in section 527. Unrelated organizations. Answer “Yes” for organizations on line 51. For example, if you
For purposes of these instructions, the any transaction between the reporting reported a one-time transfer to an unrelated
section 501(c)(3) organization completing this organization and an unrelated noncharitable noncharitable exempt organization on line
Schedule A (Form 990) is referred to as the exempt organization, regardless of its amount, 51a(ii), you should not list the organization on
“reporting organization.” if the reporting organization received less than line 52.
A noncharitable exempt organization is adequate consideration. There is adequate Column (b). Enter the exempt category of
related to or affiliated with the reporting consideration where the fair market value of the the organization; for example, “501(c)(4).”
organization if: goods, other assets or services furnished by Column (c). In most cases, a simple
1. The two organizations share some the reporting organization is not more than the description, such as “common directors” or
element of common control or fair market value of the goods, other assets or “auxiliary of reporting organization” will be
2. A historic and continuing relationship services received from the unrelated sufficient. If you need more space, write “see
exists between the two organizations. noncharitable exempt organization. The attached” in column (c) and use a separate
A noncharitable exempt organization is “exception” described below does not apply to sheet to describe the relationship. If you list
unrelated to the reporting organization if: transactions for less than adequate more than one organization on line 52, identify
consideration. which organization you are describing on the
attached sheet.

Page 8 Instructions for Schedule A (Form 990)