A supporting organization is a separate legal entity organized to benefit a public charity. The supporting organization enjoys the advantages of public charity status without having to meet the public support test. Although a supporting organization may be formed to benefit any type of public charity, the use of this form is particularly common in connection with community foundations. Supporting organizations are distinguishable from donor-advised funds because they are distinct legal entities.

Care Foundation
Care Foundation (CF) is a "healthcare conversion foundation" and a "supporting organization" to Northwest Arkansas Community Foundaion (NWACF). It was founded after the sale of Northwest Health System to Quorum Health Resources in November 1998. Since Northwest Health System was a nonprofit organization, federal law required that the net proceeds of the transaction be either donated to charity or held exclusively for the benefit of charity. Care Foundation's board of directors chose the second option.

The board of directors also spent much time determining what type of foundation would satisfy IRS requirements for the future (since there was no nonprofit hospital). The decision was made to become a "supporting organization" to a community foundation — NWACF. For more information on Care Foundation, visit www.carefdn.org.

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