Rule: Organizations qualify as tax-exempt if:

1. It is both organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes; for public safety testing; for the prevention of cruelty to children or animals; or to foster national or international amateur sports competition,

2. No part of its net earnings goes to any private shareholder or individual, and

3. No substantial part of its activities consists of carrying on propaganda or otherwise attempting to influence legislation (direct participation in a political campaign is prohibited).

Choice "A" is correct. Organizations that carry on insubstantial non-exempt activities may still qualify for its tax-exempt purpose.Choices "d", "c", and "b" are incorrect, per the above explanation.