According to a study of federal tax records conducted by the Scripps Howard News Service, thousands of nonprofits misrepresent their fundraising costs when submitting their annual tax forms.
Forty-one percent of all 37,987 charities and other nonprofit groups that collected at least $1 million according to their most recent report to the Internal Revenue Service made what experts agree is a ridiculous claim: They raised significant amounts of money without spending a dime to do so.
On their annual tax forms, these 15,389 nonprofits said they spent nothing for advertising, telephone solicitations, mailed donation appeals, professionally prepared grant applications or staff time for face-to-face pleas for contributions.
But, the real challenge may come from donors. Nonprofits face significant pressure from donors to report low operating costs in a highly-competitive market for donations.