Overview of Inurement/Private Benefit Issues in IRC 501(c)(3)

At the heart of tax-exempt status under section 501(c)(3) is a requirement that a charity be operated for a public, rather than a private, benefit. The conundrum that is private benefit has successfully withstood fifty years of efforts at explication. This outline will review those efforts.

This cheat sheet was adapted and edited from Andrew Dana. It explains the core concepts of private inurement and private benefit and tests to check for them.

This resource outlines the key elements of private inurement and impermissible private benefit and provides examples in the conservation context.

Questions_to_assist_in_private_benefit_analysis.docx This is a handy set of questions to ask when reviewing a transaction or activity for private benefit, adapted from a document by the accredited Nature Conservancy.

This reference delves into triage of risks, identify where flexibility exists and illustrate application with a series of case studies. Common issues include service delivery to landowners, transfer of development rights, program facilitation fees and conservation easement violations to name a few.

Land Trust Standards and Practices, Practice 2C. Federal Tax Exemption, includes one element with four sub-elements. This module addresses Practice 2C1b: Do not knowingly engage in prohibited activities, such as private inurement or impermissible private benefit.

A sample of a Conservation Easement Amendment Information & Approval Form from the accredited Hudson Highlands Land Trust.