This proscription derives from the requirement that an organization operate exclusively for exempt purposes, which it cannot do if it operates for the benefit of private interests. An organization may be impermissibly devoted to private use where private interests have control, directly or indirectly, over its assets, and thereby secure nonincidental private benefits. In such a circumstance, we are led to the conclusion that petitioner is not operated exclusively for charitable purposes. Second, the non-profit corporation lacks any formal voting control over the partnerships' operations. The operations of the general partnerships are managed by a four-person board, with each of the two partners electing two members.
Any deadlock is to be resolved by an arbitration process.
Third, the non-profit corporation lacks any other formal or informal control sufficient to ensure the furtherance of charitable purposes. The Court specifically cited the lack of coordination with the non-profit's affiliate hospital and the failure of Redlands to demonstrate any level of charity care. In addition, the contract is practically non-terminable by the partnership. It is not a substitute for legal advice or individual analysis of a particular legal matter. Readers should not act without seeking professional legal counsel.