Of that, an average of 2 cents went to programs, tax records show. Sometimes it's difficult just tracking how donations are spent. In part, that's because of sloppy reporting by the groups on their taxes and by solicitors in financial reports required by the state. For example, dollar amounts on a solicitor's report to the state often differ from the badge group's tax returns. That makes it difficult to know how much money a solicitor really raised and how much of it went to the badge group.
Some groups omit on their tax returns that they used a solicitor at all.
The practice can be legal, thanks to a vague portion of the federal tax code. And it's a growing trend, according to a recent analysis by the Chronicle of Philanthropy. The magazine found a quarter of nonprofits left fund-raising and solicitor costs off their taxes. That appears to be 71 percent of its revenue on programs, easily exceeding charity-industry standards. Accounting for all costs, Lodge 3 actually spent 21 percent on programs.