The gerund phrase "volunteering at the animal shelter" contribute to the text that the phrase acts as a noun that is the subject of the sentence.
"Volunteering at the animal shelter in my neighborhood" is a gerund phrase as It begins with a gerund, and includes others modifiers and objects, and gerund phrases always work as nouns. Therefore, the phrase in the excerpt works as a noun and at the same time also it works as the subject of the sentence.
Hence, the correct answer is option C: The phrase acts as a noun that is the subject of the sentence.
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