They are a wonderful way to make money. Don Stewart started the Don Stewart Association to produce his services on television. He also started 22 more charities that had links to the Association.
He or his lawyer also studied the tax code and was particularly interested in gifts in kind, which are non-cash donations. Now, one of the things most charities strive for is to indicate that they are successful and have the ability to raise a lot of money because their services meet such a large need in the world. Stewart found that gifts in kind, if used imaginatively, could boost the reported revenue of a charity. The higher the reported revenue, the more likely that you'll raise some cash along the way. So, Stewart set about boosting the revenues of the 22 charities in his network by having them donate gifts in kind to each other.
Along the way he raised $29,000,000 in cash over a three-year period. Most of that cash went to pay the people running the charity and for such items which charity A donated to charity B such as expensive cars (Hummer, BMW), rent for a private home, land in Montana.
Only 5% of the cash escaped from the network. Not a bad business, heh?
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