(B)
Qualified charity
(i)
In general
The term “qualified charity” means any organization—
(I)
that is—
(aa)
described in
section 501(c)(3) of title 26 and exempt from tax under section 501(a) of such title;
(bb)
an eligible entity; or
(cc)
a public housing agency as defined in
section 1437a(b)(6) of this title;
(II)
that is certified by the appropriate State authority as meeting the requirements of clauses (iii) and (iv); and
(III)
if such organization is otherwise required to file a return under section 6033 of such title, that elects to treat the information required to be furnished by clause (v) as being specified in section 6033(b) of such title.
(ii)
Certain contributions to collection organizations treated as contributions to qualified charity
(I)
In general
(II)
Collection organization
The term “collection organization” means an organization described in section 501(c)(3) of such title and exempt from tax under section 501(a) of such title—
(aa)
that solicits and collects gifts and grants that, by agreement, are distributed to qualified charities;
(bb)
that distributes to qualified charities at least 90 percent of the gifts and grants the organization receives that are designated for such qualified charities; and
(cc)
that meets the requirements of clause (vi).
(iii)
Charity must primarily assist poor individuals
(I)
In general
(II)
No recordkeeping in certain cases
(III)
Food aid and homeless shelters
Except as otherwise provided by the appropriate State authority, for purposes of subclause (I), services to individuals in the form of—
(aa)
donations of food or meals; or
(bb)
temporary shelter to homeless individuals;
shall be treated as provided to individuals described in subclause (I) if the location and provision of such services are such that the service provider may reasonably conclude that the beneficiaries of such services are predominantly individuals described in subclause (I).
(iv)
Minimum expense requirement
(I)
In general
(II)
Poverty program expense
For purposes of subclause (I)—
(aa)
In general
(bb)
Exceptions
(v)
Reporting requirement
The information required to be furnished under this clause about an organization is—
(I)
the percentages determined by dividing the following categories of the organization’s expenses for the year by the total expenses of the organization for the year: expenses for direct services, management expenses, general expenses, fundraising expenses, and payments to affiliates; and
(II)
the category or categories (including food, shelter, education, substance abuse prevention or treatment, job training, or other) of services that constitute predominant activities of the organization.
(vi)
Additional requirements for collection organizations
The requirements of this clause are met if the organization—
(I)
maintains separate accounting for revenues and expenses; and
(II)
makes available to the public information on the administrative and fundraising costs of the organization, and information as to the organizations receiving funds from the organization and the amount of such funds.
(vii)
Special rule for States requiring tax uniformity
In the case of a State—
(I)
that has a constitutional requirement of tax uniformity; and
(II)
that, as of December 31, 1997, imposed a tax on personal income with—
(aa)
a single flat rate applicable to all earned and unearned income (except insofar as any amount is not taxed pursuant to tax forgiveness provisions); and
(bb)
no generally available exemptions or deductions to individuals;
the requirement of paragraph (2) shall be treated as met if the amount of the credit described in paragraph (2) is limited to a uniform percentage (but not greater than 25 percent) of State personal income tax liability (determined without regard to credits).