From their page:
Freedom Alliance has established a permanent Scholarship Trust Fund to aid the children of these brave Americans so that we will be able to help the children of American heroes when it is their turn to attend college.
I think that spells it out. It’s meant to be a permanent fund. They have to invest and save.
Although I am not a CPA I do have an MBA in Finance and a JD degree, and serve of the board of directors and provide legal services to a number of not-for-profit organizations. I spent about five minutes reviewing the Freedom Alliance's 2008 Tax Return, and the first thing that jumped out at me is exactly what you point out: The Freedom Alliance has about $16 million in investments and $3 million in cash and is obviously operating as a charitable trust or endowment. Thus, the Freedom Alliance administrative overhead and expense is about one-third of the assets that are used to fund the scholarships and other charitable distributions. In my experience, this is not out of line for a trust of this size, and the asset to expense ratio should improve as the size of the trust continues to grow because the expenses are relatively fixed whether the trust assets are $10 million or $100 million.
I note that Debbie "the Shrill" Schlussel does not cite the opinion of a CPA or other expert on charitable organizations to support her conclusions and relies instead upon unnamed friends and friends of friends as proof that Hanity travels in style.
I also note that I am not a Hannity Groupie, and view him as the blonde cheerleader who knows all the cheers, but not a lot about the game. Nevertheless, I am willing to bet that Schlussel has this very wrong and once again comes off as a jealous attention whore.