A private fire department serving a small community is typically:

The correct choice reflects that many private fire departments operate under government contracts to provide fire protection services to communities. These contracts allow private entities to serve public needs while still being compensated for their services. This model often helps efficiently manage local resources, ensuring that communities receive reliable fire protection while allowing the fire department to maintain financial stability.

While private fire departments can operate under various funding models, many frequently have contracts with local governments to ensure that properly funded services are delivered. This arrangement allows for mutual benefit, where communities can choose providers that meet their specific needs, while private departments can maintain operational viability.

In contrast, the other options highlight alternative funding structures or organizational setups that are not as commonly associated with the typical operation of private fire departments. While some may be nonprofit or rely on volunteers, or even subscription fees, these models do not accurately represent the typical arrangement for a private fire department serving a smaller community, which often relies on government contracts for funding and operational support.