posted on Feb, 12 2010 @ 06:29 PM
Under US federal law, charities are given a considerable amount of flexibility in what they are allowed to do before they jeopardize their tax-free
status. Many big charities do things like: hire highly paid employees who are often related to the charities' leaders, engage in business ventures
like real estate development, and even get involved in politics.
When you donate money to a big-name charity, you should not assume that the lion's share of the money is going towards items like food and medicine
for the poor. Much of that money goes towards paying "administrators," "managers," and "executives" who must get paid a "reasonable"
compensation.