Not sure how non-profits work in USA but in UK whilst charities can't give profits they can give massive wages/bonuses to people through payroll. You can start a charity, take donations, pay yourself a huge bonus and then declare the charity insolvent -- "no profit made, all available funds used for charitable purposes".
I think the major difference is that donors are expected to lose that money any way. Non-profit is not for profit by definition. There can be still fraud and false advertising, but at least there is no expectation of profit.
