Copied from the mailing lists after announcement of the update of the policy
PublicSupportTest: What does that mean ?
This refers to US tax code. This site is easier to understand: http://www.sharinglaw.net/npo/PublicSupportTest.htm
Basically if a donor gives more than 2% of your income the portion of that donors donations over 2% are treated as business income (like selling t-shirts), rather than public support (donations).
Part of the reason for the existence of this rule is keeping non-profits from being a front for private interests while still enjoying tax-exempt status. Monies from government sources, and other qualifying non-profits are considered automatically to be public support by the nature or their source.
I've brought up concerns related to public support (e.g. http://lists.wikimedia.org/pipermail/wikien-l/2007-October/084183.html), and excessive influence from large donors (e.g. http://lists.wikimedia.org/pipermail/wikien-l/2007-October/084251.html) in the past and I am thrilled to see the foundation doing something to address this area.
What is an "applicable test for public support"? Why are donations from other charities exempt ?
The idea is that other non-profits (large foundations, for example) should be free to support the mission of the organization, but are obligated to the same standards under the US code. Is there a difference between the Gates Foundation giving $ versus Bill Gates, individually, or Microsoft, as a company? The government thinks so. The point of the gift policy is to put the consideration of such gifts in the sound discretion of the Board. Now the policy is explicit.