Not necessarily; if you donate $40,000 to a charity you work for, and as part of the duties of your job they provide you with a $40,000 car... This situation i

Not necessarily; if you donate $40,000 to a charity you work for, and as part of the duties of your job they provide you with a $40,000 car... This situation is surprisingly common; ESPECIALLY with religious charities. John Oliver had a great segment on it; but the problem extends to nonprofits as well (it's just that "religious" charities can wave the "discrimination against religion" flag). Basically, if you set up a religious nonprofit and funnel a lot of money through it, there's very little oversight from anyone about what you do with that money. And yes; people do use these types of charitable trusts to pocket avoided taxes. The legal complexity of it all precludes anyone who's not High Net Worth from using them (it's simply not profitable to pay lawyers to do the paperwork for less than a whole lot of money).