There are some pretty serious problems with that article's claims
First, she doesn't seem to understand the meaning of the words she uses, like "expenses." She repeatedly talks about how much money the charity spends on "expenses" as if that's being wasted, when in reality,
that's how most charities spend their money. It's called "program expenses." If I run a soup kitchen and spend 95% of my revenues on soup ingredients and only 5% on grants to homeless people, then I will have "expenses" that comprise 95% of my budget and "grants" that only total 5%.
Second, she's deliberately misrepresenting the C3's mission. It is
not exclusively a charity designed to raise money for scholarships. It explicitly states that one of its primary purposes is to conduct community education and public policy research, just like organizations such as Greenpeace or Brookings.
Third, whether through ignorance or design, she is drastically misrepresenting the programs budgets. If you actually look at the 990s that she links to, you can see her errors.
That year, Freedom Alliance took in $8,781,431 in revenue and gave $1,060,275.57 total–or just 12%–to seriously wounded soldiers and for scholarships to kids of the fallen. Remember, this is well below the 75% required to be considered a legitimate charity.
Let's actually look at the 990.
Total revenue: $8.71m
Expenditures:
*$2.3m on public policy and education - all of this is 100% within the definition of charitable work.
*$1.27m for Troop outreach programs - all of this is 100% within the definition of charitable work.
*$1.23m for Scholarship fund ($800k of which is in direct grants) - all of thsi is 100% within the definition of charitable work.
Total program expenses: $5.31m
Fundraising expenses: $975k (well within the average range and even on the low side for an average charity of this size)
Retained assets: $2m (also perfectly acceptable)
And after claiming in written letters to donors that 100% of the money donated, via the Freedom Concerts or otherwise, to the scholarships would go directly to the scholarships and not to expenses, the Freedom Alliance decided to do the contrary and charge expenses anyway–charging a whopping $436,386 to give out $802,250 in scholarships. That means that 35% of the $1,238,636–all of which was supposed to go to scholarships for these kids of the fallen–went to Freedom Alliance.
She must be illiterate, because the 990
explicitly states that all administrative expenses for the scholarship program came out of unrestricted donations.
It goes on and on from there, but there's no way that anyone with a modicum of understanding of how 501c3s operate and a shred of integrity could have looked at those 990's and made the bull**** claims that she did.
