“Profligate spending may not be the rule for charitable foundations, institutions founded by wealthy individuals to fund good causes – and take advantage of hefty tax breaks. But recent disclosures about the lavish habits of a few foundations have turned up a more common, and perfectly legal, scandal: the small portion of their assets that foundations actually give to charity. Under federal law, private foundations must donate a mere 5% of their assets each year to remain exempt from virtually all federal and state income taxes. But even that modest requirement is undercut by rules that let foundations count administrative expenses, such as rent and salaries, as part of the 5%.”