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petitioner or AEF earmark the funds for a particular program or
activity. Because the contributions are made to a donor-advised
fund, petitioner cannot definitively earmark the moneys for any
specific project. Rather, petitioner is limited to making
recommendations which AEF is not bound to, and will not
necessarily, implement. Moreover, petitioner has not established
that AEF has in fact earmarked petitioner’s contributions for a
particular venture.
Second, the regulations mandate that the payments be
earmarked for a substantial program or activity of the supported
organization. Again, the administrative record belies that
supporting Northville, Michigan, is a substantial activity of
AEF. Even benefiting Michigan as a whole has not been shown to
be a substantial focus of AEF, and there is no evidence that the
rather minimal expenditures made in that State by AEF ($5,500 in
1998) would be interrupted absent petitioner’s support.
Petitioner therefore has failed to prove that its operations will
ensure AEF’s attentiveness.
V. Control Test
In view of our holding above that the integral part test is
not met on the record presented, we need not reach the control
test. Petitioner’s failure to satisfy section 509(a)(3)(B)
obviates any need to consider section 509(a)(3)(C) or to give
further attention to section 509(a)(3)(A). Even if petitioner
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