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from those activities that produce income to be applied to the
other partners’ profit.
Taken to its logical conclusion, petitioner’s thesis would
suggest that an organization whose main activity is passive
participation in a for-profit health-service enterprise could
thereby be deemed to be operating exclusively for charitable
purposes. Such a conclusion, however, would be contrary to well-
established principles of charitable trust law.
Frequently, a business enterprise may have charitable
effects. * * * A private hospital relieves sickness and
suffering. * * * However, the primary object of these
institutions is the pecuniary gain of the operators. Hence
trusts to aid in the founding or maintenance of private
hospitals or clinics * * *, which are business enterprises
operated for the purpose of making profits for stockholders
or owners, are not charitable even though they involve
incidentally some public benefits. “It is not charity to
aid a business enterprise.” [Bogert & Bogert, The Law of
Trusts and Trustees, sec. 364 (Rev. 2d ed. 1991) (quoting
Butterworth v. Keeler, 219 N.Y. at 449, 114 N.E. at 804);
fn. refs. omitted.]
Clearly, there is something in common between the structure
of petitioner’s sole activity and the nature of petitioner’s
purposes in engaging in it. An organization’s purposes may be
inferred from its manner of operations; its “activities provide a
useful indicia of the organization’s purpose or purposes.”
Living Faith, Inc. v. Commissioner, 950 F.2d 365, 372 (7th Cir.
1991), affg. T.C. Memo. 1990-484. The binding commitments that
petitioner has entered into and that govern its participation in
the partnerships are indicative of petitioner’s purposes. To the
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