[jfengel]

The term "nonprofit" is rather weird. It means that the organization doesn't have shareholders, so no person owns the money that the organization doesn't spend.

Salaries are a common thing that nonprofits spend their money on. That table shows some very comfortable salaries, but not at all out of keeping with an organization that size. There are many larger nonprofits with much larger salaries: a number of health care systems are incorporated as nonprofits, and their executives get well into the tens of millions.

You also get organizations like MITRE, a billion-dollar federal contractor that pays million-dollar salaries to its C suite. I'm honestly not sure how that's legal. The health care firms are dubious enough.

Still... the idea is that they're not trying to earn a profit for shareholders. They don't pay taxes on their profits because nobody owns that money. The employees who earn 7 and 8 figure salaries, they do pay ordinary income tax on that money, as anybody else does.

I really don't know how much actual work Wikimedia does and whether it's spending that $88M well or badly. But I can say that it is in keeping with the American tax system's use of the term "nonprofit", which is not really what people expect it to be from the word alone.

[legitster]

I don't know why it should even be that controversial.

It was never the government's intent to determine which nonprofits are truly noble and just. It's also not their job to govern how well they spend their resources, or how big they are allowed to be.

If they are lying or defrauding donors, there are existing legal remedies.

[jfengel]

The government has an interest in preventing corporations from being used to avoid taxes. For example: I donate $50,000 to Jfengel Charities LLC, whose sole purpose is to purchase a car and then allow me to use it. I write off that $50k on my taxes, and still get the use of the car. Nobody is defrauded, except the IRS.

So they limit tax-deductible corporations to certain categories that have some kind of benefit. They don't police it very closely, but if you come to their attention, they'll force you to pay taxes and possibly penalties.