Legal definition of charity:
"1) in general the sentiment of benevolence, doing good works, assisting the less fortunate, philanthropy, and contributing to the general public. 2) an organization which exists to help those in need or provide educational, scientific, religious and artistic assistance to members of the public.
Charities are usually corporations established under state guidelines and require IRS approval in order for contributions to them to be deductible from gross income by donors."
SOURCE:
http://legal-dictionary.thefreedictionary.com/charity"The Concept of Charity under the Internal Revenue Regulations has slowly evolved and expanded. This evolution can be seen from the changes in the regulations over a number of years. Early Treasury regulations provided that:Corporations organized and operated exclusively for charitable purposes comprise, in general, organizations for the relief of the poor. The fact that a corporation established for the relief of indigent
persons may receive voluntary contributions from the persons intended to be relieved will not necessarily deprive it of exemption. Treas. Reg. 118, section 39.101(6)-(b) (1943)."
SOURCE:
http://www.irs.gov/pub/irs-tege/eotopicb80.pdfCharities may be tax exempted or not tax exempted. But a charity is "Corporations organized and operated exclusively for charitable purposes comprise, in general, organizations for the relief of the poor."
There isn't any rules broken. For the fact that it isn't tax exempted doesn't change the definition of charity,
1. Charities are usually corporations established under state guidelines (True)
2. require IRS approval in order for contributions to them to be deductible from gross income by donors. (Working on it)