By Vince Phillips
Let’s consider the fate of $20,000 that a hardworking Chaffee County resident pays in federal taxes. Watch what happens to it on its magical journey:
It goes to Washington.
Then it comes back to Colorado.
Then a portion finally trickles back to Chaffee County, often through a local nonprofit like the Chaffee Housing Trust. How much of your original $20,000 actually gets spent on real local needs?
According to the latest Government Accountability Office (GAO) report, the federal government reported $186 billion in improper payments in FY 2025 alone — money paid out that shouldn’t have been, or in the wrong amount.Here’s a realistic breakdown of one $20,000 tax dollar making the full round trip (based on typical grant overhead rates and CHT’s own Form 990 filings):
- Federal layer (12% overhead): ~$2,400 lost to D.C. bureaucracy. Remaining: $17,600.
- Colorado state layer (10% overhead): ~$1,760 lost. Remaining: $15,840.
- Local nonprofit layer (CHT-style, ~25% overhead): ~$3,960 lost to salaries, compliance, rent, and the endless grant-writing needed just to apply for our own money back. Remaining: ~$11,880.
- Improper payments / unaccounted leakage (~8% average for this type of grant): ~$950–$1,200 that simply disappears into errors, overpayments, or ineligible uses.
Final amount that actually gets spent on the ground in Chaffee County? Roughly $10,900–$11,500.That’s only about 55 cents on the dollar.
The taxpayer is still out the full $20,000. The local nonprofit receives only a fraction of it. The middle layers stay conveniently invisible. And here’s the kicker: how that remaining money is apportioned when it finally returns to Chaffee County is decided by federal bureaucrats and Colorado state staff in Denver, not by local priorities. We’re forced to jump through their hoops, fill out their forms, and hope their whims align with what our mountain communities actually need.
Meanwhile, if that same resident had donated the $20,000 directly to the Chaffee Housing Trust or another local group, nearly the full amount would go straight to local housing work, with far less paperwork, no multi-state bureaucracy, and real local accountability. The resident would still be out the $20,000, but the community would get dramatically more value from it, and the donor could claim a charitable deduction that modestly reduces their tax bill.
This is the Fonzi Scheme in its purest form: Government creates complexity, extracts its cut at every layer, then celebrates the small portion that makes it back home as a magnanimous “investment in our communities.”
We’re not against helping people in need. We’re against pretending that routing money through Washington and Denver is the smartest or most compassionate way to do it.
In Summary, direct local giving is dramatically more efficient. The overhead and leakage in the federal grant cycle are real and substantial. Governments (federal, state, and local) have a strong institutional, self-serving incentive to maintain or expand spending, it’s a well-documented pattern across decades and administrations. Bureaucracies rarely volunteer to get smaller. When private and local solutions step up to give directly without the government acting as the middle…(man?peoples?), the rational response would be lower taxes or reduced government scope. In practice, government will not cut taxes, it will simply find new ways to spend the money. The size of government almost never allows itself to shrink.
Out here in the mountains, we can see the waste with our own eyes. Maybe it’s time we started keeping more of our own money closer to home, where it actually gets spent on real problems instead of feeding the machine that’s supposed to solve them, but seemingly never does.
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