This refers to the phenonmenon when a public charity fails its 33% public support test because a large grant overwhelms the diversity of support the nonprofit receives. Consider a nonprofit that has existed for five years using all volunteer labor to shuttle senior citizens to medical appointments. Then a foundation decides to make a multi-year grant to hire several staff and buses. Suddenly, to the IRS, the nonprofit looks like an arm of the foundation, and thus the nonprofit has been "tipped." This is more problematic to the nonprofit since it can interfere with securing additional donations, but there are a number of avenues that the nonprofit can take to keep its public charity status; consult a good nonprofit CPA or attorney.
Occurs when a private foundation's support "tips" a public charity out of compliance with the public support test, converting it into a private foundation.
When a grant is made that is large enough to significantly alter the grantee's funding base and cause it to fail the public support test. This would result in the grantee's conversion to a private foundation and would be detrimental to both grantor and grantee. It would also require expenditure responsibility on the part of the grantor.