If one undertakes a "charity challenge" to raise money and awareness through some performance feat, can one cover one's costs for the feat out of the raised money?
For instance, supposing someone walked from John o' Groats to Land's End raising money from family and friends. Would it be legal to cover the equipment and supplies associated with this out of the money raised?
In the U.S. it could be considered fraudulent to solicit money for a purpose and then to direct the money to anything else, including the costs of solicitation or performance of a feat associated with the solicitation.
One could also run afoul of the federal gift tax if one collected more than the exempt amount from a single donor and used any of it for expenses the IRS deemed to be personal. (Organization and operation as a 501(c)3 would avoid this, and could also allow donors to get a tax credit for their contribution.)
Many U.S. states have further laws regulating the solicitation of funds for charitable purposes.
Compliance can be so tricky that it would not be prudent to do this independently.
