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FUNDAMENTAL CONCEPTSAlthough some courts have upheld this approach by the IRS, 353 others havediffered. 354EDUCATIONAL INSTITUTIONSAn “educational organization which normally maintains a regular faculty andcurriculum and normally has a regularly enrolled body of pupils or students inattendance at the place where its educational activities are regularly carried on”is a public charitable organization and thus is not a private foundation. 355 Thistype of organization must have as its primary function the presentation of formalinstruction. 356It is pursuant to these rules that institutions such as primary, secondary, preparatory,and high schools and colleges and universities derive public charitableorganization status. These institutions also encompass federal, state, and otherpublic schools that qualify under these rules, although their tax-exempt andpublic charitable organization status may be derived from their categorization asgovernmental agencies or instrumentalities. 357 An organization cannot achievepublic charitable organization status as an operating educational institution,however, when it is engaged in both educational and noneducational activities(for example, a museum operating a school), unless the noneducational activitiesare merely incidental to the educational activities. 358Thus, to avoid private foundation status as an educational institution, theorganization must be more than an organization that generally engages in educationalactivities. 359HEALTH CARE INSTITUTIONSA hospital is a public charitable organization and thus is not a private foundation.360A hospital is defined, for federal tax purposes, as an “organization the principalpurpose or functions of which are the providing of medical or hospital careor medical education or medical research.” 361 A hospital must promote the healthof a class of persons broad enough to benefit the community and must be operatedto serve a public rather than a private interest. 362 The term hospital includesfederal hospitals, and state, county, and municipal hospitals that are instrumentalitiesof those governmental units; rehabilitation facilities; outpatient clinics;extended care facilities; community mental health and drug treatment centers;and cooperative hospital service organizations. The term does not, however,353 See, e.g., Parshall Christian Order v. Commissioner, 45 T.C.M. (CCH) 488 (1983).354 See, e.g., Tennessee Baptist Children’s Homes, Inc. v. United States, 604 F. Supp. 210 (M.D. Tenn. 1984). Ingeneral, see Tax-Exempt Organizations § 8.5.355 IRC §§ 170(b)(1)(A)(ii) and 509(a)(1).356 Reg. § 1.170A-9(b). See also Rev. Rul. 78-309, 1978-2 C.B. 123.357 See text accompanied by notes 376−377.358 Reg. § 1.170A-9(b).359 Educational institutions are discussed in greater detail in Tax-Exempt Organizations § 11.3; educational organizationsin general are discussed at id. ch. 7.360 IRC §§ 170(b)(1)(A)(iii) and 509(a)(1).361 IRC § 170(b)(1)(A)(iii).362 Rev. Rul. 69-545, 1969-2 C.B. 117. 106