I don't understand what you are talking about by definition a charity is public under 501(c)(3) status otherwise it would be considered a private foundation, such as the Clinton Foundation, which in turn donates money to public charities.

There are strict rules for charities and the IRS should be on them but regardless of the structure you can come up with someone can and will exploit it. That is why you need to research a charity prior to donating. I mean if you are going to donate $5 I am not suggesting spend 10 hours looking in to them but if you are donating $1000's you would be foolish if you didn't.

The bottom line is there are bad charities out there and they skate by on the edge of the law but there are a lot of very good ones also you just need to understand that and they do a lot of good.