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§ 3.4 PUBLIC CHARITIES AND PRIVATE FOUNDATIONSgroup of persons from that community or area. Individual donors relinquishcontrol over the investment and distribution of their contributions and theincome derived from the contributions, although donors may designate the purposesfor which the assets are to be used, subject to change by the governingbody of the community foundation. 398Publicly Supported Organizations—Service Provider Entities. An organizationis not a private foundation if it is a charitable organization that is broadly,publicly supported and thus is responsive to the general public, rather than tothe private interests of a limited number of donors or other persons. 399For a charitable organization to achieve non-private foundation status underthese rules, it must normally receive more than one-third of its support from anycombination of (1) gifts, grants, contributions, or membership fees; 400 and (2)gross receipts from admissions, sales of merchandise, performance of services,or furnishing of facilities in activities related to its tax-exempt function, 401 aslong as the support in either category is from permitted sources. Permittedsources are governmental units, 402 the charitable institutions, 403 donative-typepublic charitable organizations, 404 and persons other than disqualified persons 405with respect to the organization. Thus, an organization seeking to qualify underthis one-third support test for service-provider publicly supported organizationsmust construct a support fraction, with the amount of support received fromthese two categories of sources constituting the numerator of the support fractionand the total amount of support received by the organization being thedenominator of the support fraction. 406 The organization may exclude from boththe numerator and denominator of the support fraction an amount equal to oneor more unusual grants. 407There is no limitation on the amount of support that may be taken intoaccount in determining the numerator of the support fraction under these rulesconcerning gifts, grants, contributions, and membership fees, except that thissupport must, as noted, come from permitted sources. In computing the amountof support received from gross receipts that is allowable toward the one-thirdrequirement, gross receipts from related activities received from any person orfrom any bureau or similar agency of a governmental unit are includible in anytax year to the extent that the receipts do not exceed the greater of $5,000 or1 percent of the organization’s support for the year. 408398 Reg. § 1.170A-9(e)(10)(i). These rules, concerning all three categories of donative-type public charitable organizations,are discussed in Tax-Exempt Organizations § 11.3.399 IRC § 509(a)(2); Reg. § 1.509(a)-3(a)(4). See also IRC § 170(b)(1)(A)(viii).400 IRC § 509(a)(2)(A)(i).401 IRC § 509(a)(2)(A)(ii).402 See § 3.4(a), text accompanied by notes 376–377.403 See § 3.4(a), text accompanied by notes 344–377.404 See § 3.4(a), text accompanied by notes 378–398.405 IRC § 4946. See Tax-Exempt Organizations § 11.2.406 IRC § 509(a)(2)(A); Reg. § 1.509(a)-3(a)(2).407 Reg. § 1.509(a)-3(c)(3).408 Reg. § 1.509(a)-3(b)(1). 111