Charitable activity provides a lot of political cover for really shitty religiously motivated behavior. For example, giving money to the Salvation Army is probably a net-negative effect on the world.
It funds anti-homosexual political activity, attaches onerous religious proselytization to their poverty outreach, subsidizes in-your-face guilt-tripping bell ringers, crowds out other anti-poverty efforts, and reduces the charitable effort that donators bring to more worthwhile causes.
It's not literally the worst charity - that probably belongs to Susan G. Komen - but it is pretty terrible.
No idea, and I'm not sure it even matters. Such charities tend to help anyone afflicted by the plight they chose to alleviate.
> Are they giving to their church and it's called charity?
Since it was coming from a LessWrong contributor in Skepticon, I'd say this is improbable. Most likely, he scanned the study for such errors.