I spend a lot more than the average amount of time looking at public financial records of nonprofits (form 990). A ton of nonprofits with 501c3 status are functionally money laundering in my opinion. Not all of them for sure but I've seen a shocking amount of them where the contributions they receive are largely spent on executive salaries, acquiring assets, and other luxuries that do not go towards the intended purpose of the charity (expensive fundraising galas, travel, meals, vehicles etc). Many rich people give large donations to charities that they are involved in, then write off that donation in their taxes, then travel and dine on the charities expense. This shit is rampant. Before you donate money to a charity, look up their form 990 and see how they're spending the money you give them. Make sure to check the Schedule J for officer and director salaries.
Money you donate to "legitimate" charities can be deducted from your taxes, but money you give directly to mutual aid groups or to individuals in need cannot be. This is a way for the state to control and influence who you are allowed to share with, and encourage donations to organizations that conform to the state's rules and discourage direct aid in your community or towards radical political efforts. The legitimized middle man is made mandatory or you forfeit the tax deduction.
This makes it extremely difficult for mutual aid groups to collect large donations. The people making large donations don't want to forfeit the tax deduction, and the individuals collecting the donations outside of a legitimized financial entity are liable to have those donations taxed as their own income.
Some radical nonprofits sponsor other groups without tax ID status, which rules. They use their tax exempt status to receive larger donations of behalf of other grassroots groups, then give it back to them as grants to be spent how the non status group intends. This is the best model I've seen for getting around this problem. But it is not without risk as seen in the Stop Cop City RICO cases.
If you guys like this kinda stuff maybe next time I'll talk about how politicians writing books is another way to launder money and get around campaign finance laws.
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