[Stu from NYC]

Originally Posted by retiredguy123

You don't need to create a false charity. A legal one will do just fine. I read a lot of IRS Form 990's filed by charities. One that stands out was a charity created to sound like the well known "Make a Wish" charity. It is a common tactic to make the charity name sound like a well known charity. They collected almost $500K in one year. The CEO collected a salary of $200K, his wife, the vice President, collected $150K and his mother-in-law collected $100K as the treasurer. So, almost all income went to three people. The charity owned two condos at Disney World, and they would allow a sick child and their family to use one of the condos for a few weeks each year. For the rest of the year, they used the condos for themselves. They raised the money by hiring telemarketers, who received 80 percent of whatever donations they collected. I know this because the naive telemarketer who called me told me how much she would receive if I donated. This was not a false charity. As long as they provided a free vacation to a sick child, as stated in their mission statement, it was all legal. So, the problem is with our extremely lax laws for creating and operating charities. If a charity has a legitimate mission statement, and follows the IRS reporting rules, they have no obligation to be efficient or to spend the money wisely. Wasting taxpayer money in a charity is not illegal.

Wow. When I get a fishy call I ask the person on the other end what percentage of funds does the charity get. Very often the answer is I do not know.

Sad how easy it is to get away with fraud