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FUNDAMENTAL CONCEPTSThe term support 409 (in addition to the two categories of public support referencedabove) means (1) net income from unrelated business activities; (2) grossinvestment income; 410 (3) tax revenues levied for the benefit of the organizationand either paid to or expended on behalf of the organization; and (4) the value ofservices or facilities (exclusive of services or facilities generally furnished to thepublic without charge) furnished by a governmental unit to the organizationwithout charge. The term does not include any gain from the disposition ofproperty that would be considered as gain from the sale or exchange of a capitalasset, or the value of exemption from any federal, state, or local tax or any similarbenefit. 411 These six items of support are combined to constitute the denominatorof the support fraction.To avoid private foundation classification under these rules, an organizationalso must normally receive not more than one-third of its support from the sumof (1) gross investment income, 412 including interest, dividends, payments withrespect to securities loans, rents, and royalties; and (2) any excess of the amountof unrelated business taxable income over the amount of the tax on thatincome. 413 To qualify under this test, an organization must construct a grossinvestment income fraction, with the amount of gross investment income receivedconstituting the numerator of the fraction and the total amount of supportreceived being the denominator of the fraction. 414These support and investment income tests are computed on the basis of thenature of the organization’s normal sources of support. An organization is consideredas normally receiving one-third of its support from permitted sources andnot more than one-third of its support from gross investment income for its currenttax year and immediately succeeding tax year if, for the four tax years immediatelypreceding its current tax year, the aggregate amount of support receivedover the four-year period from permitted sources is more than one-third of itstotal support and the aggregate amount of support over the four-year periodfrom gross investment income is not more than one-third of its total support. 415Supporting Organizations. Another category of charitable organization that isnot a private foundation is the supporting organization. 416 Organizations that aredeemed not to be private foundations because they are supporting organizationsare those organizations which are not themselves one of the public institutions 417or publicly supported organizations, 418 but are sufficiently related to organizationsthat are public or publicly supported entities so that the requisite degree ofpublic control and involvement is considered present. 419409 IRC § 509(d).410 IRC § 509(e).411 IRC § 509(d).412 IRC § 509(e).413 IRC § 509(a)(2)(B).414 Reg. § 1.509(a)-3(a)(3).415 Reg. § 1.509(a)-3(c)(1)(i). These rules are discussed in Tax-Exempt Organizations § 11.3.416 IRC § 509(a)(3); see also IRC § 170(b)(1)(A)(viii).417 See § 3.4(a)(i).418 See § 3.4(a)(ii), (iii).419 Reg. § 1.509(a)-4(a)(5). 112