In Under the Rainbow Child Care Ctr., Inc. v. Cnty. of Goodhue, 741 N.W.2d 880, 885 (Minn. 2007), the Minnesota Supreme Court held that it is "inherent in the concept of charity that there is a gift--that is, the services, goods, or whatever is conceived as the charitable benefit must be provided to the recipients of the charity without requiring them to pay full value for it." Id., 741 N.W.2d at 890, Rainbow, a state-licensed child care center, was organized as a Minnesota non-profit corporation. Id. at 883. It charged tuition for every child, and required the same tuition of children receiving government assistance. Id. "Rainbow's weekly rates were for the most part above market rates." Id. at 893. "Rainbow offered no scholarships and had in the past pursued collection efforts against families that did not pay." Id. at 883. The supreme court first clarified that "by examining the extent to which the recipients of the charity are required to pay for the assistance received in whole or in part, North Star factor three assesses whether the organization's operation confers a gift." Id. at 883. To satisfy factor three, the organization had to provide its benefit free of charge or at a rate considerably less than market value or cost. Id. at 890. The court held that "if factor three is not satisfied, the organization cannot be found to be an institution of public charity." Id. at 887. The supreme court then surveyed numerous cases in which, applying the foregoing standard, it had ruled upon the IPPC status of organizations that charged recipients substantial amounts for benefits conferred. Id. at 890-92. The court noted that it had approved IPPC status for two non-profit entities that provided housing at below-market rates. Id. at 890-91. The court commented, however, that "while granting the exemption to organizations that charged considerably less than market prices, we have consistently denied the exemption ... to entities that charged recipients of their 'charity' substantially market rates, even where some fees were discounted or forgiven." Id. at 891. The court repeatedly observed that it had refused to approve IPPC status for organizations that (noting that housing organization had "provided no scholarships or rent assistance to needy students"); id. (noting that HMO "had no policy to provide substantial discounts to those for whom cost of treatment would be an unreasonable burden"); id. at 892 (noting that record was "devoid of evidence demonstrating that the organization's intended purpose is to provide housing and services for the economically disadvantaged or that it will continue to do so in the future"). Absent a reduction from market rates in a substantial number of instances, the court concluded, an organization cannot establish that it confers gifts and, accordingly, cannot qualify for IPPC status. Id. at 892. With this understanding, the supreme court ruled that Rainbow was not entitled to IPPC status: Rainbow sets its rates at or above market level and charges all the recipients of its services at those rates. Rainbow makes no accommodations for those who are unable to pay the full rates.... Rainbow "offers no scholarships" and "retains the right to dismiss a child in the event that families are unable to afford fee payments" .... It is clear that ... Rainbow does not satisfy the third North Star factor. It is equally clear that Rainbow does not provide any services on a charitable basis and cannot therefore qualify as an institution of purely public charity. Id. at 895. In closing, the court commented: "There must be a substantial charitable, or gift, component to an organization's operation in order to qualify as an institution of purely public charity. That means the organization must provide a substantial proportion of its goods or services free or at considerably reduced rates." Id. at 896.