*2363 The Survey Associates, Inc., Held to be a corporation operated exclusively for educational or charitable purposes, contributions to which are properly deductible from gross income under the provisions of section 214(a)(10) of the Revenue Act of 1924.
*595 This proceeding involves a deficiency in income tax as determined by the Commissioner for 1924 in the amount of $1,609.73, and has for its only issue the question of the deductibility of certain donations made by the petitioner to the Survey Associates, Inc.
FINDINGS OF FACT.
The petitioner is a resident of New York City. During 1924 he was president of Survey Associates, Inc., and in that year contributed $3,150 to the aforementioned corporation.
The Survey Associates, Inc. (hereinafter sometimes referred to as the "corporation") was incorporated under the laws of New York in 1912 as a membership corporation without shares or stockholders. Its objects are stated in its constitution as follows:
* * * To promote the cause of constructive philanthropy exclusively*2364 by education and educational methods, including the publication and circulation of books, pamphlets and periodicals.
The corporation publishes two magazines, The Survey and Survey Graphic, both of which are devoted to carrying out the purposes as indicated above. The foregoing publications and the work being done by the corporation are the outgrowth of activities carried on *596 prior to 1912 by the Charity Organization Society of New York City, with which petitioner was actively connected.
The corporation has no stockholders, but has a membership which is made up of persons who contribute $10 or more to the purposes of the organization. These contributions have ranged from $10 to $25,000. No member has the right to share in any distribution of the property of the corporation and no profit therefrom inures to the benefit of any individual. Neither the president, any one of the vice presidents, nor any member of the board of directors receives any salary or fees. The salaries paid are to individuals who devote their entire time to the enterprise, the highest-salaried person being the editor of the magazines, who receives $600 per month. The activities of the corporation*2365 are supported by the contributions referred to above, by subscriptions to the magazines and advertising therein, and certain other minor sources of income. The income and disbursements of the corporation for the fiscal year ended September 30, 1924, which year is typical of several years as to which statements were furnished, were as follows:
| Total expenses, including field work and surveys in preparation of articles | $179,492.84 |
| Receipts from subscriptions to magazines, advertising and sales | 83,459.91 |
| Operating deficit | 96,032.93 |
| Contributions and memberships from people interested in the work | 96,285.00 |
| Balance | 252.07 |
The purposes of the corporation are carried out through the two magazines referred to above which, broadly speaking, cover the fields of social and philanthropic work, and the related fields of public health, education, community organization and social and industrial relations. As illustrative of the type of work done, the predecessor of the corporation, under the direction of the petitioner, was instrumental in bringing into existence the National Organization for the Prevention of Tuberculosis, and the corporation is still active in its*2366 behalf. Studies were made of the living conditions and other factors entering into the origin and spread of this disease. The data thus obtained was disseminated through the publications of the organization. In 1924 a similar study was made of heart disease which resulted in the establishing of various heart clinics and the creation of a widespread interest in this disease. In the same year a study was made of the unemployment situation and the information thus obtained was given to the public through the magazines of the corporation. The data secured in these research investigations were not only published but also an attempt was made to interpret them in such a manner that they could be helpfully used in solving the particular *597 problem requiring solution. The following "Analytic Index" of an issue of one of the magazines shows the broad field of activities of the corporation and the general class of subjects dealt with:
1. Child welfare:
Care of homeless children.
Make the streets safe.
How foster children turn out.
2. Family welfare:
Life at the tip of Manhattan.
Social agencies and the "gasoline gypsy."
Over-organizing for welfare.
British*2367 old-age pensions.
Adjusting wages to family needs.
3. Law and lawbreakers:
Safety and the law.
The courts and labor abuses.
What shall social workers do with the law?
4. Conquest of disease:
Are the sick getting sicker?
Wastes due to common colds.
Control of epidemics.
Health books.
5. Promotion of health:
Cooperating for health.
A half century of public health.
Dangerous manufacturing processes.
New support for "Henry Street."
Organizing for world health.
A new medical center in New York City.
6. Mental hygiene:
Mental hygiene in Massachusetts.
New ways of being poor.
Peculiarities of behavior.
7. Organizing social forces:
Learning the social agencies.
Cooperating for safety.
Endowment for "Henry Street."
Social service in St. Louis.
Between neighbors.
Too much organization.
8. Town planning:
Safety and the city plan.
9. City communities:
Should people play on Sunday?
Organizing a city for health.
British housing.
10. Country communities:
Group participation in the country.
Religion and rural regeneration.
Foundations of rural culture.
Playing on Sunday.
New York State*2368 parks.
11. Immigration and race relations:
immigration by airships.
Jewish and gentile ways of life.
12. School and community:
What are students interested in?
Know your own city.
Safety education in schools.
Value of country schools.
Incorporation at Fairhope.
13. Education outside the schools:
New folkways in education.
Spread of health intelligence.
Status of workers' education.
Policemen as educators.
Spreading psychology and biology.
14. Industrial conditions:
Aftermath of industrial accidents.
British unemployment.
Tetraethyl and labor safety.
Employment methods.
More about coal.
Living wages and family allowances.
15. Industrial relations:
New developments in management.
The meaning of unions.
16. Social invention in industry:
More cooperation.
Management as a social ideal.
17. Peace and international relations:
International control of opium.
18. Motives and ideals:
The spirit of rural leadership.
Books for other lands.
Morale as affected by work accidents.
Fearing God and playing the game.
*598 No person is connected with the organization because of his religious*2369 or political affiliation, nor does it support any organization or activity of a political character. Usually the activities in which the corporation is engaged are noncontroversial in character, but when the subject under consideration may be liable to any character of controversy, both sides of the question are presented, the object being to present fairly all available facts with regard thereto without partisanship and without an attempt to urge a particular solution of the problem.
The activities of the corporation are not confined to any particular community but extend to all parts of the United States. The circulation of the magazines beyond the United States to some thirty or forty foreign countries.
The magazines are used as textbook material in some 200 or 300 educational institutions, colleges and high schools. Members of the corporation's staff who are working on a particular problem or are familiar with a particular question are frequently called upon to lecture at an educational institution or in some community or city where that problem is being considered. Usually no pay is received from the organization sponsoring a lecture. Lectures are given gratuitously*2370 by a paid member of the corporation's staff. As typical of the foregoing work, the editor of the magazines in question made the following statement at the hearing as to his engagements for the preceding six weeks:
I have lectured first, before the Adult Educational Association at Cleveland, had 400 people; before Antioch College; before the council of Social Agencies, that is the central body of all the philanthropic and charitable organizations of Columbus, Ohio; before the Ohio Sate University at Columbus; before the lunch meeting of the Association of social workers and the social workers club of Cincinnati; before the Hungry Club, which is a civic body of Pittsburgh; there are about 1200 business men, educators, social workers, and so forth in that club; before a group called by the Y.M.C.A. and Chamber of Commerce in Jersey City, on employment; I must speak in April before, - well, then I spoke at the Society of Ethical Culture - a religious body in New York on unemployment, the Social Workers Conference at Philadelphia is holding a two day conference the first of next month and I am to lead off the speaking; the Association of Settlements in Chicago is having a conference*2371 and I am to lead off there.
The activities of the corporation did not include anything having the character of lobbying or influencing legislation.
OPINION.
SEAWELL: The petitioner is here seeking to be allowed a deduction from gross income on account of contributions made to Survey Associates, Inc., his contention being that the aforementioned corporation *599 comes within the classification of charitable or educational corporations contemplated by section 214(a)(10) of the Revenue Act of 1924, which provides for a deduction on account of a contribution to:
* * * (B) any corporation, or trust, or community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual; * * *
We have heretofore held that in order for a corporation to come within the purview of the above statute it must meet three tests: (a) It must be organized and operated for one or more of the specified purposes; (b) it must be organized and operated exclusively for*2372 such purpose or purposes; and (c) no part of its income must inure to the benefit of private stockholders or individuals. . There is no question as to any failure to satisfy the third test; not only is this prohibited by the articles of incorporation, but also there was no income available for the year with which we are concerned which might be the subject of distribution, and the same seems to be true of other years. It is only because of the contributions received that the corporation is able to balance its budget and continue its activities. The petitioner's answer to qualification under the other two tests is that the corporation in question was organized and operates exclusively for educational and charitable purposes, whereas the Commissioner takes the opposite position. On a consideration of the entire record, which includes testimony as to the history and activities of the corporation and also copies of the magazines which were circulated for the year before us, as well as certain subsequent issues, we are of the opinion that the petitioner's contention should be sustained.
We do not consider it here necessary to say that*2373 the corporation is to be considered as exclusively educational or charitable in its nature; either is sufficient in itself, or we think it likewise sufficient if its activities are partly educational and partly charitable, provided the whole of its activities may be included under these two classifications. It is rather in the last-named class that the corporation would seem to fall. Of course, there is nothing of charity here in the sense of directly giving money, sustenance or medical aid to the needy, but we do not conceive the foregoing to be exclusive means of dispensing charity. For example, when the corporation made a study of a given disease and as a result of its research work caused to be brought about a movement which gave to humanity - both rich and poor - incalculable good, we fail to see where a very broad definition of the word charity is required to bring this work within its meaning. It was an unselfish service rendered for the *600 good of mankind without any hope or thought on the part of the organization rendering such service of compensation being received therefor. What is given is service and ideas - not commodities. Similar comments might be made*2374 of the great majority of the activities carried on by the corporation, though often the charity element may be almost, if not entirely, absent and only the educational element would appear. Of course, the educational methods pursued are not those commonly followed in our institutions of learning, but similar results are accomplished. And, again, it might be said that the education is not of the masses whom the organization would usually benefit, but rather a limited class that is interested in the study of a given economic or social problem, but it is by the enlightened information furnished these groups that they are led to act for the good of all. The magazines are used for textbook material in many institutions of learning, lectures are given before various interested groups, and the results of the research work are disseminated through the magazines. As heretofore stated, most of the subjects dealt with are noncontroversial in character, but on the few controversial questions considered an impartial, fact-finding survey is made and both sides of the question are presented without any show of partisanship or attempt to influence the adoption of a particular solution to the problem*2375 other than as the facts warrant. Such activities may closely approach the commonly understood field of journalism, though a distinction should not usually be difficult to draw between the ordinary journalistic corporation, where commercialism and profit are involved or where controversial questions are sought to be solved in a particular manner, or where other similar distinguishing features exist, and a corporation such as we are here concerned with.
The respondent relies on , and . The Fales case involved donations to various clubs and organizations which had features which placed them beyond the purview of the statute as exclusively educational or charitable organizations. One club was partly social and partly educational, and the other organizations disseminated controversial or partisan propaganda or were engaged in political activities. The Slee case had to do with donations to the American Birth Control League, an organization engaged by means of lobbying and propaganda in the furtherance of a cause highly controversial in character. Similarly, we denied a deduction to the League*2376 for Industrial Democracy (), but the organization was not only decidedly partisan in character, but also advocated drastic political and economic changes which are contrary to the existing economic theories and practices upon which our society is founded and which pervade our system of government.
*601 On the whole, we are satisfied that the Survey Associates, Inc., is a corporation organized and operated exclusively for charitable or educational purposes and that contributions made thereto by the petitioner in 1924 are deductible from gross income under the provisions of section 214(a)(10) of the Revenue Act of 1924. Cf. , and .
Judgment will be entered under Rule 50.